P7.11M solves Mindanao crisis

DIE HARD III
Herman Tiu Laurel
5/14/2012



Last May 9, state-run National Power Corp. (Napocor) completed its fast-tracked rehabilitation of the Pulangi IV hydroelectric plant in Bukidnon, allowing it to generate power to its installed capacity of 250 megawatts (MW) from half of that before.  That the rehabilitation was started only mid-April this year at the height of the Mindanao power crisis shows government's hurried response to the uproar from Mindanaoans who have suffered the crippling effects of the long blackouts--outages that were deemed deliberate.
 
As a result, Mindanao's economy suffered billions in losses, estimated by some to reach P60 billion, with government's Power Sector Assets and Liabilities Management (Psalm) Corp. claiming a loss of up to P15 billion.
 
To wit, the estimated power shortfall was anywhere between 100 to 150 MW.  The Pulangi rehab, meanwhile, costing only P7.11 million, has already restored at least 100 MW of installed electric capacity to Mindanao.  The question is, why didn't the Department of Energy (DoE) order this rehab earlier when this new administration took over in 2010?  Was it negligence or plain sabotage?
 
If Pulangi IV alone had been maintained properly at such a minimal cost early on, with the rest of the Agus-Pulangi system also rehabilitated two years prior, there would not have been any Mindanao power crisis to speak of.
 
Instead, what BS Aquino III, his DoE officials, as well as politicians such as Sen. Serge Osmeña have repeatedly claimed for the past two years was that a power crisis in Mindanao can only be solved by installing new coal-fired and other power plants.
 
Sen. Edgardo Angara, author of the RE (Renewable Energy) law in turn has repeatedly claimed that solar and wind power for Mindanao is the answer, hiding the fact that his RE law charges P20 per kilowatt-hour (kWh) for solar and wind, compared to hydro's P2/kWh.
 
In all, these officials are acting more as lobbyists, with Osmeña calling for the privatization of Agus-Pulangi and other hydroelectric resources on behalf of the oligarchs (such as the Lopezes, Aboitizes, Alcantaras, and Ayalas); with DoE officials siding with the coal and mining lobby; and with Angara rooting for his RE program in favor of foreign energy companies that would have to be in partnership with the usual suspects, i.e. the power oligarchs, who are already in RE projects.
 
What is made clear from these historical facts is that national policy on this matter has been ruled solely by lobby interests working through the entire political structure.  Not a single one of these officials have acted with responsibility and concern for the genuine interest of the people of Mindanao and the nation as a whole; thus, leading to the situation today that has produced the "highest power cost in Asia" devastating our industries and quality of life.
 
Last Saturday evening, on our Destiny Cable GNN program, Jojo Borja of Iligan Light and Power and lawyer Homobono Adaza reported on how the Energy Regulatory Commission (ERC) is again trying to pull a fast one on the public.
 
As we wrote in this space last week, they recounted how notices of a crucial ERC hearing on the case of the Maximum Allowable Price (MAP) petition of the Manila Electric Co. (Meralco) arrived suspiciously late--on a Sunday afternoon at legal counsel Adaza's residence, less than a day before the hearing, and, for petitioner Borja, on the Friday before the Monday hearing.
 
Despite the many underhanded moves, we're glad that the Meralco petition was postponed anew, saving the power firm's 6 million consumers from an early approval of a very onerous power rate base that is 100 percent over what the company should be charging for distribution.  The present rate, by the way, is based on what Borja says are several instances of Meralco equipment overpricing by as much as 900 percent!
 
Mang Naro Lualhati, octogenarian consumer activist, who works in cooperation with the team of Borja, Adaza, Butch Junia, Alan Paguia, Ferdie Pasion, and many others, laid the basis for the case that Borja and Adaza are now locking horns with Meralco over at the Court of Appeals (CA); thus, constraining the ERC from trying to resolve Meralco's petition in its sala at this time.
 
Furthermore, Lualhati has filed a motion for reconsideration on the ERC's dismissal of his opposition to Meralco's MAP of around P1.60/kWh, which, according to the accountant-oppositor--aided by Borja's facts, figures, and documents--should only be P0.90/kWh.
 
If Lualhati, Borja et al. will prevail in this epic struggle, they can win for Meralco customers as much as 50 percent of the distribution charges they pay, not including several more if other issues, such as the Performance Based Regulation scheme and its 17 percent rate of return vs the old Return-on-Rate Base's 12 percent, are eventually dealt with and overturned.
 
More importantly, another fact was highlighted in our program that should make everyone stop and take the predatory power victimization of millions of Filipinos very seriously.  Says Borja, "To this day, Iligan Light and Power is charging only P5.50/kWh retail on a customer base of 60,000 electricity connections while Meralco is charging P11 to P12/kWh on a customer base of 6 million electricity connections."
 
Whatever happened to the principle of "economies-of-scale," where the bigger the market and operation of an enterprise, the lower its prices for products and services should be?  Well, given that the scale of the losses from the Mindanao power crisis, amounting to billions of pesos, was solved by a mere P7.11-million rehab project, we should know that these power pirates are always up to no good.
 
(Tune in to 1098AM, dwAD, Sulo ng Pilipino/Radyo OpinYon, Monday to Friday, 5 to 6 p.m.; watch Destiny Cable GNN's HTL edition of Talk News TV, Saturdays, 8:15 to 9 p.m., with replay at 11:15 p.m., this May 12 on "Malampaya plunder" with Rep. Neri Colmenares; visit http://newkatipunero.blogspot.com for our articles plus TV and radio archives)