Fitun
calls on State to acquire PowerGen
PowerGen’s
energy generating plant in Trinidad
By
Yvonne Webb
The
Trinidad Guardian
Port
Spain
Petroleumworld.com
07 23 06
In
a bid to keep the price of electricity to consumers
down, the Federation of Independent Trade Unions
is demanding state ownership of all power plants
in the country.
Fitun
President David Abdulah yesterday called on government
to take immediate steps to re-acquire the 49 per
cent of PowerGen now in the hands of Mirant and
BP.
Abdulah
said the power purchase agreement between T&TEC
and PowerGen has resulted in T&TEC paying more
than it should have, had it done the generation
itself.
“Therefore
we could reduce the cost of electricity by having
PowerGen re-incorporated into T&TEC and consumers
could therefore benefit and maybe the rate increase
which has been proposed by the RIC may no longer
be necessary or in fact could be significantly reduced,”
Abdulah said.
He
added that government must also acquire Trinity
Power and ensure that all generation of electricity
is done by an integrated T&TEC that is also
responsible for all transmission and distribution.
Abdulah
noted the statement by US company Mirant, which
owns some 39 per cent of PowerGen, that it was selling
off all its shareholdings in Caribbean power companies.
Abdulah
said this was an excellent opportunity, “for
government to re-acquire the 49 per cent of Powergen
that was sold in 1994 and have Powergen re-integrated
into the T&TEC so we have one public utility
from generation to transmission and distribution.”
A
decision by the Patrick Manning administration in
1994 to privatise T&TEC’s generation assets
in a bid to upgrade its facilities, led to the establishment
of Powergen.
The
ownership structure consisted of T&TEC with
51percent ; Southern Electric International (SEI)–39
percent and Amoco Business Development Co. (ABDC)–
10 percent.
In
the 12 years since, changes in ownership have resulted
in Mirant being the holder of 39 percent and BP
10 percent of the shares in Powergen.
“The
privatisation of T&TEC’s generating assets
made absolutely no sense and has in fact resulted
in huge costs to consumers and to T&T,”Abdulah
said.
Abdulah
said contrary to government’s rationale for
privatising in 1994, “SEI and ABDC invested
not one cent in new generating capacity. All that
was done was to improve efficiencies by the very
maintenance strategies recommended by the OWTU at
a cost of just US $35 million.
“The
other US $71 million spent by SEI/ABDC went to the
government as payment for shares in Powergen.
Trinidad
Guardian / T&TEC has right to buy Mirant’s
PowerGen stake
Citing
the shareholders’ agreement, T&T’s
utility regulator pointed out yesterday that the
Mirant Corporation must offer the shares it proposes
to sell to T&TEC and BP.
Mirant
announced last week that it proposed to sell off
its Caribbean assets, including its 39 per cent
share in PowerGen. PowerGen’s two other shareholders
are T&TEC, with a 51 per cent stake, and BP
with a 10 per cent stake.
In
a release, the Regulated Industries Commission (RIC)
said said the Power Purchase Agreement signed in
1994 gives T&TEC and BP the right to buy Mirant’s
stake if they decide to sell.
“Mirant
must notify the other investors (T&TEC and BP)
in writing, prior to the sale, of the terms of the
proposed sale, the assignment or transfer and grant
either investors the right to purchase,” the
release said.
In
the release, the RIC promised to monitor the situation
as it is the statutory body which regulates both
T&TEC and Powergen.
In
its final determination on the T&TEC rate review
application, the RIC had explained it was important
for it to be involved in any aspect of negotiations
that affected its “regulatory responsibilities.”
Last
week, Mirant announced a plan to sell its holdings
in the Caribbean and the Philippines as it attempted
to raise cash to implement a share buy-back..
Mirant’s
Caribbean holdings include an 80 per cent stake
in the Jamaica Public Service Co Ltd and a 55 per
cent share in the Grand Bahama Power Company, among
other holdings.
According
to a release on prnewswire.com, the Caribbean holdings
contributed US$156 million to Mirant’s adjusted
earnings before interest, tax, depreciation and
amortisation (EBITDA). - TG Friday 21st July, 2006
The Trinidad Guardian
Thursday 20th July, 2006
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©2006 Trinidad Guardian. All Rights Reserved.
