IPPs owe public $9.99-B

DIE HARD III
Herman Tiu Laurel
2/27/2012



Much as this space would like to tackle the myriad of other issues bedeviling the nation, we are constantly dragged back to the electricity or power plunder that continues to ravage this country to this day. We have repeatedly highlighted the anomalous fact of the Power Sector Assets and Liabilities Management (Psalm) Corp. and National Power Corp. (Napocor) debt staying at $18 billion despite over 10 years and almost 90 percent of the state’s power assets being “sold off” to the private sector since the start of the power privatization program under the Electric Power Industry Reform Act (Epira) of 2001. It is as if money from the sales vanished into thin air.

Last week, one clue was given by the state agency that manages these assets. When its top honcho, Emmanuel Ledesma Jr., said, “Psalm is yet to collect $9.99 billion in additional proceeds from the transfer of IPP (independent power producer) contracts to private administrators as of September 2011,” what it says is that taxpayers and power consumers are to be charged what the IPPs should have paid for but didn’t.

As for the other half of that $18-billion debt, Ledesma claims it as “$8.44 billion in debts assumed from” Napocor. Now wasn’t the privatization of Napocor assets supposed to cover all these? Where did proceeds from the sale of diesel-fired to hydroelectric and geothermal power plants go? How about the latest $4-billion privatization of the TransCo (the erstwhile state-owned transmission grid) to the private sector operator, National Grid Corp. of the Philippines (NGCP), that has also not been collected after two years?

In June 2011, it was reported that “government may use the receivables from the concession contract of the NGCP” on the pretext that “selling the receivables ahead of the scheduled payment of NGCP may help in the efforts to reduce the universal charge (UC).”

Wait a minute: TransCo was earning P18 billion a year when it was sold off; now it’s not even paid while the NGCP is already earning; hence, we now even have to rediscount or sanla the receivables? What name can you give to such a deal if not “historic swindle?”

I am just aghast at the magnitude of this scam and the impunity with which it continues to be perpetrated before the eyes of 95 million Filipinos. With the silent blessings of four Edsa administrations (Cory Aquino, Fidel Ramos, Gloria Arroyo, and now PeNoy), this national swindle rages on because of the silent consent of the entire Senate and Lower House of Congress, in collaboration with all government electricity agencies--from Psalm to the Energy Regulatory Commission (ERC).

What is the power behind these power plunderers that all government institutions are cowed into compliance, even as we ordinary folk see their dictates as an unconscionable swindle?

What are we, the people of this nation, to do when our supposed representatives in government stand idly by as our pockets are looted and our economy is systematically laid to waste by the garrote of high electricity prices and a progressively failing economy over years and years of power plunder?

The latest statements of the Psalm chief only reveal how helpless government authorities really are in the face of the IPPs and power plunderer-privateers. Instead of pressing for these companies to pay up what are clearly debt obligations to government and the Filipino people, our supposed leaders continue to find ways on how to unburden these companies--to the detriment of the public.

With deceitful intent, Psalm has been trying to pass on these debts of the privateers via piecemeal transfers: P140 billion to be paid from the national budget and assumed by taxpayers; P0.39 per kilowatt-hour (kWh) as UC, shouldered again by power consumers over 20 years; with another bulk to be charged to Malampaya’s earnings; and only God knows what else.

If they were to pass these on as one lump sum to each electricity bill, it would amount to an additional P5/kWh over 20 years, which means up to 35 percent of added cost to each power consumer, who will fork out over P100 billion in power payments annually.

Congress has not approved such piecemeal schemes just yet because the ploy is too blatantly oppressive and dishonest; but it has done nothing to resolve the power plunder for the nation’s welfare either.

Malacañang, for its part, has only played deaf and dumb to the issue and the pleas of all sectors of society. At the rate the situation is developing, it is apparent that government has been made inutile, with the implication being that, at some point, all these debts will finally be transferred to us when we are at our most vulnerable--perhaps under another “revolutionary government” dictatorship a la Cory--so that the IPPs and power plunderers will never be made to pay the $18 billion anymore, thanks to Edsa I, Edsa II, and PeNoy.

Meanwhile, the power crisis in Mindanao is growing unabated despite an overabundance of capacity from hydroelectric dams that were deliberately sabotaged. The NGCP now projects an average shortfall there of 179 megawatts (MW) next month and a high 345 MW in April, even when just one facility, the Agus-Pulangi hydroelectric complex, already has 727 MW of installed capacity—this despite its production of only 467 MW today due to seemingly deliberate maintenance deficiencies.

Two Napocor power barges, 117 and 118, privatized to Aboitiz’ Therma Marine Corp. can, as well, generate 200 MW; but the rates are so high that the 33 Mindanao electric cooperatives refuse to buy from them.

Four power barges of Psalm, 101 to 104, lying idle in Luzon are being asked by the Mindanao Business Council to be deployed there to provide emergency power. But this cannot be done allegedly because it would violate the Epira’s ban on government from participating in power generation, even if it is just to help the people. How twisted, indeed, have our country’s laws become? Yet some twisted minds still have reason to celebrate Edsa?

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