Cagayan de Oro City, Philippines — As the Power Sector Assets and Liabilities Management Corporation (PSALM) moves to appraise the Mindanao STEAG Power Station ahead of its planned privatization, the Philippine Movement for Climate Justice (PMCJ) warned that Mindanao’s power shortage is being used as an excuse to keep an aging, failing coal plant running with no clear retirement timeline.
The two-unit plant, with a total of 232 megawatts (MW) capacity, is now rebranded as SPI Power Incorporated (STEAG). It is Mindanao’s first coal-fired power plant and is located within the PHIVIDEC Industrial Complex in Villanueva, Misamis Oriental. The National Grid Corporation of the Philippines (NGCP) estimates that Mindanao could already run out of power reserves by 2028. This not only impacts the Mindanao grid but will also affect the already-scarce electricity in the Visayas, where the region is transferring its excess energy. PMCJ cautions that aside from keeping outage-prone coal plants operating, the conditions will be used to justify building and fast-tracking the remaining 735 MW of coal plants in Zamboanga, Davao, and Misamis Oriental.
“PSALM’s move to do the valuation is already telling that the government has already made up its mind to sell STEAG. But this coal plant is part of the problem, not the solution,” said Lucita Gonzales, Senior Campaigns Officer of Mindanao.
Electricity market records and grid advisories show repeated operational failures at the plant from 2023 through 2026, including forced outages caused by boiler fouling and a boiler tube leak. On July 7, 2025, STEAG Unit 2 had a forced outage reportedly linked to protection testing on Unit 1’s tie breaker. STEAG Unit 1 was also listed as out of service due to unplanned outages on August 4, 2025.
The pattern continued this year. On August 7, Unit 2 was offline for planned maintenance, which NGCP cited as one reason Mindanao could not send as much power to the Visayas. On August 26, Unit 1 tripped again, limiting the transfer of excess power. Despite these operational failures, the Department of Energy (DOE) decided in February 2025 not to retire the plant early, saying it was needed as a critical backup power source during the rehabilitation of the Agus-Pulangi Hydropower Complex (APHC). But Mindanao has more than enough power to fall back on. They are currently producing 700 to 900 MW of surplus electricity, and as much as 450 MW is supplied to Visayas via the Mindanao-Visayas Interconnection Project.
“More than the valuation, we deserve an honest evaluation of STEAG’s outage records, operating costs, and returns. A plant this unreliable is not a backup but a liability that consumers keep paying for. Such an assessment should inform a comprehensive and just energy-transition strategy that focuses on reliable renewable energy, energy storage, grid improvements, and protection for impacted workers and communities. Now the government has a choice to either sell off an unreliable coal plant to the private sector or make STEAG one of the first steps in a real coal phase-out. That choice must be made now, not in 2031,” Gonzales further explained.
PMCJ also questioned who stands to gain in this attempt to privatize STEAG. AboitizPower, which now holds an 85% stake in STEAG, is best positioned to benefit from the privatization. STEAG is one of the pilot coal plants under the Asian Development Bank’s (ADB) Energy Transition Mechanism (ETM).
Instead of retiring coal plants, ETM allows a repurposing option that leads to false solutions and has become a public-funded bailout for fossil fuel companies. To put it simply, aside from keeping the profits from failing coal plants, AboitizPower can keep expanding its coal and gas portfolio while benefiting from government loans that pay the company for the years the plant would no longer operate.
Coal-powered power stations remain prone to failure, and the system becomes vulnerable when large centralized units fail. To create a more secure and resilient energy system, it is better to use a combination of renewable energy, energy storage, more robust transmission lines, and distributed generation rather than relying mainly on coal.
PMCJ calls on the government to reject short-sighted commercial extensions like privatization and instead deliver what the public urgently needs: a decisive commitment to retire the plant and a just transition to renewable energy. PMCJ stresses that the government must not remain passive. It must listen to affected communities, address long-standing health and environmental grievances, strictly enforce environmental and public-health standards, and hold power producers accountable for their impacts. The government should explain why another private operator should be allowed to continue profiting from an aging coal plant. Instead, it should prioritize a clear closure and just-transition pathway that protects communities, workers, and electricity consumers.
“Dugay na kaayo kaming nag-antos sa aso (smoke), sakit, ug mahal nga kuryente. Ang pagpalugway sa operasyon sa karaan ug nagkadaot nga STEAG coal plant hangtod 2031 nagpalugway usab sa among pag-antos.Ang coal dili tinuod nga seguridad sa enerhiya. Hugaw kini, mahal, ug peligro sa among panglawas. Ang tinuod nga seguridad sa enerhiya mao ang renewable power nga nanalipod sa komunidad, nagmugna og tarong nga trabaho, ug nagpaubos sa presyo sa kuryente,” declared Gloria Abe-abe, president of BARUG Villanueva in Villanueva, Misamis Oriental. Members of BARUG Villanueva were former residents in what is now the present site of STEAG, and were relocated to give way to the construction of the plant.
“Energy security should not mean staying dependent on coal for decades. Mindanao has many opportunities to shift to cleaner energy through renewable power, battery storage, stronger power grids, and community-based energy systems that can provide more reliable and sustainable electricity,” said Mary Lyn Amor Sabellano, PMCJ Campaign Officer in Misamis Oriental. “Our communities should not pay with our health for the government’s and energy companies’ continued dependence on coal. Coal is not energy security. It is dirty, expensive, and dangerous to our health. Real energy security means renewable power that protects communities, creates decent jobs, and lowers electricity costs,” Sabellano said.
