Blackout pressure hit

Mindanao solons vow to stop govt power plan

MINDANAO and leftist lawmakers vowed Friday that not even the government threat of massive blackouts would break their resolve to reject the Aquino administration’s plan to privatize the Agus-Pulangui hydro-electric power plants.

The militant lawmakers and the People Opposed to Unwarranted Electricity Rates or Power joined Mindanao congressmen in lambasting the government for “bungling” the power situation on the island, which suffered a 16-hour blackout Thursday.

They also expressed alarm over the government’s continuing failure to address the critical power shortage plaguing Mindanao for the last five years.

Islands in light and darkness.  The town floats of
the municipalities of Bacnotan and Aringay (inset)
brighten up the streets of Aringay, La Union, in
Luzon during a parade of electric floats while a
schoolgirl (left) does her homework by the light
of an improvised lamp in Cotabato City, which
was plunged in darkness by the power woes of
the entire Mindanao island. CHRISTINE JUNIO
“Maybe it’s time Energy Secretary Jericho Petilla look for another job,” said former Bayan Muna Rep. Teddy Casiño, a Power convener, after the Energy Department remained clueless about what caused Thursday’s widespread outage 24 hours afterward.

The blackout, Casiño said, came on the heels of the surprise revelation that in areas of Southern Mindanao that were devastated by typhoon Pablo in 2012, 57 percent of villages still had no power despite billions of pesos spent on rehabilitation.

In a press conference Friday, Petilla said Thursday’s massive outage might have been caused by a malfunction in the Agus 1 hydro-electric plant in Lanao del Sur which took down five other plants, but he said this still needed to be verified.

“The switch there is the suspect right now, but it needs further investigation,” Petilla said.

At the same time, Petilla admitted that Mindanao will continue to suffer two- to three-hour blackouts even though the Agus-Pulangi plants are back online.

Petilla said Steag State Power Inc. ‘s 210 megawatt coal-fired power plant remains offline after the system-wide blackout experienced at 3:53 am Thursday morning.

“What will happen if Steag will continue to go offline during summer? I don’t think that will happen at this point but they can’t give a definite answer when it will be up and running. We’re not talking about months. I think they are getting some consultants at this point,” Petilla said.

Eugene Vicar, National Grid Corporation of the Philippines head for Mindanao operations and Rolando Bacani, president of the National Transmission Corp., said without the Steag plant, the grid will continue to suffer two to three hour brownouts.

“[People will experience] two- to three-hour brownouts until Steag is back,” Vicar said.

Petilla said without Steag, power in Mindanao is only 80 percent to 85 percent restored.

Petilla also urged electric cooperatives to buy power from the Interim Mindanao Electricity Market (IMEM), even though power costs more.

“I’m really hoping that they will utilize the IMEM...It may not be priced at P3 (per kilowatt-hour) but that’s the reality,” Petilla said.

But Mindanao lawmakers and their allies from the left rejected Petilla’s approach.

“The Mindanao lawmakers will continue to oppose the privatization of the Agus-Pulangui hydropower plants because we believe it was the State’s obligation to provide cheaper power to the people and privatizing it would drive the power cost to shoot up,” said Cagayan de Oro Rep. Rufus Rodriguez.

Casiño said Mindanao’s power woes will only get worse because the Energy Department under Petilla is bent on implementing the IMEM, a clone of the Wholesale Electricity Spot Market (WESM) in Luzon, which was responsible for the highest power rate hikes in history.

“The premise that Mindanao has been unjustifiably enjoying “cheap” power rates is totally wrong. True, Mindanao has lower power rates than Luzon and the Visayas. But Mindanao is actually paying much more than most major cities in Asia,” said House Senior Deputy Minority Leader Neri Colmenares and Bayan Muna Rep. Carlos Isagani Zarate, authors of House Bill 351 that seeks the repeal of the Electric Power Industry Reform Act (EPIRA).

“It is a sad fact that residential consumers in Cagayan de Oro City, the Autonomous Region in Muslim Mindanao (ARMM), Northern Mindanao, and the Davao and CARAGA regions are paying twice the electricity rates of residents in Seoul and Beijing,” Colmenares said.

As of 2011, Zarate said, the Philippines had the highest cost of electricity in Asia with an average retail rate of $0.18 per kilowatt-hour, easing out Japan that had $0.17 US cents per kilowatt-hour.

The latest available comparative data from the 18th EPIRA Implementation Status Report show that Mindanao has an effective residential electricity rate of P6.69 per kilowatt-hour, Zarate said.

“Luzon has P9.84 per kWh and Visayas has P8.19 per kWh. Except for CARAGA, all the Mindanao regions have more expensive residential power rates than Hong Kong SAR. These regions, including Cotabato City, Iligan City, Socsksargen, and the Zamboanga Peninsula all have higher residential rates than major Asian capitals like Taipei, Kuala Lumpur, Jakarta, New Delhi, Bangkok, and Shanghai, among others,” Colmenares said.

“All in all, Mindanao is paying an average of P1.82 per kWh more for electricity than the 31 major cities in Asia and Oceania as surveyed by the Japan External Trade Organization,” Colmenares said.

Worse than WESM, which operates under the limited power supply in Luzon, IMEM will be operating in Mindanao where there is an acute power shortage, Casiño said.

He echoed Rodriguez’s position that IMEM will lead to even higher prices, with power generators having a heyday manipulating the spot market.

Rodriguez said the House committee on energy, of which he is a member, would push to stop IMEM as “it aggravates, [rather] than solves the current power situation in the island.”

The House energy panel, Rodriguez said, would be holding an inquiry on Thursday in Cagayan de Oro to find out from the government how it plans to address the impending power crisis. The panel would also review the EPIRA law and put a stop to the IMEM operations.

If IMEM is allowed to adopt the same WESM schemes such as high clearing prices and automatic pass-through charges, electricity consumers all over Mindanao would suffer higher rates, Casiño said.

Already, Mindanao’s electric cooperatives are up in arms over IMEM’s more than P200 million in excess billing from Nov. 26-Dec. 25, where it charged the cooperatives for electricity that allegedly was neither ordered nor delivered, he said.

“The ECs have refused to pay said charges and are poised to ask the courts to declare IMEM illegal,” said Casiño, who comes from Davao City.

The IMEM is managed by the Philippine Electric Market Corp. (PEMC), the same company that oversees the WESM, he said.

Among the bills to be tackled in the House panel hearing is HB 351 that seeks to amend the “failed policy known as the Electric Power Industry Reform Act (EPIRA) in light of the raging power crisis in Mindanao and the long-term vision that the vital power industry should not be left to the vagaries of private interests to the detriment of our country’s national development requirements.”

“It will be wrong for government to fully let go to private hands the vital power generation sector. It will be doubly wrong for government to side with private power firms who want high prices instead of consumers and investors who want low electricity rates,” Colmenares and Zarate said.

It is important to note that these generation assets have continually reaped dividends for the government and the people and will continue to do so in the long-term, they said.

“This bill shall put a stop to the privatization of state power assets – particularly the remaining assets still in government hands – to help keep power rates stable and to keep what should be kept in state hands for the benefit of the Filipino people,” the bill’s authors said.

In the House, an administration ally revived his proposal to grant President Benigno Aquino III emergency powers to deal with the power crisis.

Eastern Samar Rep. Ben Evardone said his bill would give the President the authority to enter into a negotiated contract for the construction of new government-owned power plants.

The bill would also give the President the power to suspend value-added tax collection, “when necessary” to reduce power rates.

But Gabriela party-list Rep. Luz Ilagan said the Aquino government should be able to come up with a long-term solution to the on and off power crisis in Mindanao.

She said it has been more than three years since President Aquino assumed office in 2010, but the power situation that he inherited remained a mess.

Ilagan also called for the repeal of EPIRA, which she blamed for the high cost of electricity.

“The power problem had been there before the Aquino government because of the EPIRA and the refusal of the (past administration) to rehabilitate the Agus-Pulangui power source in Mindanao,” Ilagan said.

She also said the rotating blackouts could be an artificial measure aimed at forcing local government units to accept alternative forms of power, such as coal.

Administration allies Cavite Rep. Elpidio Barzaga, Jr., Ako-Bicol party-list Rep. Rodel Batocabe and House Deputy Majority Leader and Quezon City Rep. Bolet Banal, however, insisted the privatization was the key to solving the country’s power problem.

“We lack world class corporations who are willing to make huge investments in our country and develop our natural resources in order to effectively address our power problem. Liberalization of our

restrictive economic policies might induce the international power players to infuse capital to the Philippines and solve our perennial problem in electricity,” Barzaga said.

Batocabe shared a similar view.

“Mindanao, at the rate of power plants are being constructed there, will have more than sufficient power by 2016. The challenge now is how to harness this excess power in the Visayan Island,” he said.

Banal warned that “unless the government is able to entice more investments in the power sector, Mindanao should brace itself for more power interruptions and rotating brownouts in the coming months.” With Alena Mae Flores and Maricel V. Cruz



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