THE Philippine Competition Commision (PCC) has cleared the acquisition of Lopez-led First Gen. Corp.’s subsidiary of the Casecnan Hydroelectric Power Plant (CHEPP), saying it will not affect market competition.
“The Commission en banc on Jan. 25, cleared Fresh River… to take over the Casecnan plant seeing that the transaction would not result in substantial lessening of competition in the relevant markets,” the PCC said in a statement on Tuesday.
First Gen through its wholly owned subsidiary Fresh River Lakes Corp. was set to acquire the hydro plant from Power Sector Assets Liabilities Management Corporation (PSALM) and National Irrigation Administration.
In May 2023, Fresh River was declared the winning bidder for the sale of the plant with a price of $526 million. This was higher than the minimum bid price of $227.27 million.
The hydro plant was turned over to the government in 2021 following the expiration of the build-operate-transfer contract with the previous operator Casecnan Water and Energy Co., Inc.
On Dec. 15, PCC Mergers and Acquisitions Office opened the first phase review of the Casecnan deal, during which it found out that the volume generated by the plant “is unlikely to impact the relevant markets.”
It added that there are enough safeguards under the Electric Power Industry Reform Act of 2001 (EPIRA) to ensure the competitiveness of the market.
“The Casecnan plant’s sale aligns with PSALM’s mandate under the EPIRA to privatize all assets and liquidate all financial obligations of state-owned National Power Corporation,” the PCC said.
Located in Nueva Ecija, the run-of-river hydroelectric power plant generates energy by diverting water from the Casecnan and Taan Rivers through a 26-kilometer-long tunnel.
Last month, Ramon A. Carandang, vice-president for corporate communications of First Gen, said that the operations of the Casecnan plant would complement the company’s 132-megawatt Pantabangan-Masiway hydroelectric power plant (PMHEP).
“CHEPP adds to our renewable energy portfolio and allows us to realize synergies with PMHEP that will be unique to us as owners and operators of both facilities,” Mr. Carandang said in a Viber message.
In its latest quarterly report, First Gen said that it expects the closing and turnover date of the plant in early 2024.
The PCC, under the Philippine Competition Act, is mandated to review mergers and acquisitions to ensure that relevant markets will remain competitive and that the deals will not harm consumer welfare. — Justine Irish D. Tabile