The Department of Energy (DOE) expects the corporate life extension of the Power Sector Assets and Liabilities Management Corp. (PSALM) to facilitate the rehabilitation of the Agus-Pulangi plants in Mindanao.

During an ambush interview, Energy Secretary Raphael P.M. Lotilla highlighted that PSALM has ongoing developments scheduled for completion, but its expiration date is fast approaching.

“I welcome the approval by both the House of Representatives and Senate for the extension of the corporate life of PSALM,” he told reporters.

Senate Bill No. 2837 stated that PSALM would be extended by another 30 years, which would be a renewal from its current life expiration of 2026.

The upper chamber passed the bill in January with a 20-0-0 vote and received support from the Department of Finance (DOF) last year.

Once passed into law, PSALM could push through its plans for development, namely the Agus-Pulangi Hydropower Complex (APHC) rehabilitation.

“What has eluded us for decades now is the rehabilitation of Agus-Pulangi. Just because there is no counterparty to the rehabilitation, and if [this] finishes, it will restore an additional 400 megawatts (MW) of hydropower in Mindanao, which is very significant,” Lotilla elaborated.

Located in Mindanao, APHC has seven run-of-river hydropower facilities with 1,000 MW worth of installed capacity.

“The challenge for us now is that with Mindanao exporting up to 400 MW to Visayas and even in Luzon, then we have to rehabilitate one at a time the Agus and Pulangi plants, [which would reduce] capacity available to Mindanao’s system,” the DOE chief said.

Additionally, Lotilla mentioned the need to reassess the future of the STEAG plant—Mindanao's first coal plant located in Misamis Oriental, as it could possibly be utilized as a backup power source once APHC's rehabilitation pushes through.

Another option for STEAG, according to the DOE chief, is to retire the plant to obtain carbon credits, which would be useful to fund more renewable energy (RE) projects in the country.

To recall, PSALM had planned to retire the 210 MW STEAG plant and repurpose it with a US$476 million or P27.6 billion investment.

“We will move forward on the Agus-Pulangi rehabilitation, and the possibility is now open for building the still unbuilt Agus III plant, which has a potential of 225 MW,” according to Lotilla.