DIE HARD III
Herman Tiu Laurel
3/30/2012
The electricity spaghetti hit the ceiling fan last week, and the stench of the power oligarchs reeks all over the place. Now it’s not just electricity consumers charging the oligarchs and their captive government officials with conspiracy; local officials, such as North Cotabato Gov. Emilou Taliño-Mendoza and General Santos City Mayor Darlene Antonino-Custodio, are saying that the Mindanao power crisis is “intentional.” Even Sen. Koko Pimentel openly agrees with Mindanao Development Authority (MinDA) Chairman Lualhati Antonino’s assertion that the “artificial shortage” is the National Grid Corp. of the Philippines’ (NGCP) means to “have the Agus-Pulangi Power Plant privatized.”
The NGCP is by no means the main culprit. It goes way up to the oligarchy and the international corporatist mafia behind it. We must remember that the NGCP Frankenstein was sewn together by Fidel Ramos’ Monte Oro Corp., with the Carlyle Group catalyzing the entry of the State Grid Corp. of China, together with the Sy Group, to become the NGCP.
Monstrous as it became, the NGCP Frankenstein is but the son. The mother Frankenstein is the Electric Power Industry Reform Act (Epira), which, in its time, was sewn together by the International Monetary Fund (IMF), World Bank (WB), Asian Development Bank (ADB), the illegal Gloria Arroyo regime, the oligarchs and their Yellow “civil society,” together with the corrupt 12th Congress of Edsa II. They managed to use the thread of the ADB’s $900-million power sector loan and the IMF-WB’s $300-million rehabilitation loan release as conditions for the enactment of the Epira into law.
The local power oligarchs were also alleged to have contributed to a payola of P500,000 for every member of Congress under Speaker Sonny Belmonte, which emoluments were further spruced up by Gloria’s P10-million per congressman “O, Ilaw” project. And, like the current railroaded Corona “Articles of Impeachment,” it is doubtful that even half-a-dozen of the representatives or senators who signed the Epira even read it.
As for media, the oligarch-controlled “presstitute” (press-prostitute) merely suppressed the truth. Only a few, like this columnist and the Freedom from Debt Coalition (FDC), campaigned in the streets against it.
The argument for Epira was that the monopoly enjoyed by the government’s National Power Corp. (Napocor) was too big to be efficient and had to be broken up into smaller units. Fast forward to today and the chairman of the Senate energy committee, Serge Osmeña, himself a champion of the Epira, now argues for the expansion of the split-up units.
In his defense of Department of Energy (DoE) Secretary Rene Almendras’ disastrous handling of the Mindanao power crisis, Osmeña claims the Energy chief “is aware of economies of scale and that electricity would be cheaper for everyone if distributed over a bigger transmission grid than a smaller one…”
The shift in tone is obviously because much of the elite — a class to which Osmeña belongs — have already formed an oligopoly in the sector and are using their clout to blackmail the entire nation into swallowing the “highest power cost in Asia.”
Osmeña says, “The national reform policy on electricity… was to harness the finances and management talents of the private sector in ensuring that the country would be supplied in a timely manner with dependable, quality and reasonably priced power…” Really?
Independent power producers (IPP) are private utility companies established on the basis of state “sovereign guarantees” and/or securitization of captive consumers’ aggregate payments in a contract period. Here, securitization comes in “the form of financial instruments used to obtain funds from… investors… backed by amortizing cash flows.” These cash flows, in turn, are derived from the pockets of millions of electricity consumers.
Historically, securitization was done by the Republic of the Philippines to launch the Napocor; and as government did not shell out any money, only acting as an intermediary of the funds from power consumers, we can say that the power sector was never (repeat, NEVER) subsidized.
When the state’s power assets were still under Napocor control, the price of electricity in the Philippines was not only competitive but one of the lowest in Asia. Today, after Epira, power costs in this country have shot up way into the stratosphere.
In the case of Mindanao, we now see the IPPs blackmailing consumers, the way the privatized Aboitiz Group Power Barges 117 and 118 and the now Lopez-run Mt. Apo Geothermal are being used to force Mindanaoans into accepting 20-year, exorbitantly priced contracts, or else continue being denied much-needed electricity.
But wait. Isn’t price a reflection of these privateers’ much-vaunted “efficiency?” If so, aren’t they and other utilities like the Manila Electric Co. (Meralco) guilty of doing their jobs at a very high cost to the nation and, in fact, destroying its entire economy?
Therefore, given that these oligarchs are only “efficient” from the point of view of profit extraction, totally missing the mark of providing efficient and reliable electricity at the least cost to consumers, why should we accept any of this, in view of the fact that things have gone from bad to worse despite 90 percent of the power sector being privatized?
As if to further cover up the litany of lies that is the Epira, Osmeña raises another point, saying that “Napocor was bankrupt and that even if it sold all of its assets, it still could not cover its liabilities.”
Napocor was a very healthy and viable public corporation before Corazon Aquino, her Yellow gang, and her oligarch-patrons took over the reins of the Philippine Republic. They abolished the Ministry of Energy and placed its functions under the Office of the President to ensure an efficient dismantling of the nation’s energy development program. They established almost a dozen IPPs and cancelled half a dozen major energy projects (including the Bataan Nuclear Power Plant). All these led to a “Dark Age” under a Cory-appointed oligarch as Napocor head. What followed during the Ramos era were 43 more plundering IPP contracts that were to be the most massive bloodletting of Napocor’s resources to this day — via the $18-billion so-called stranded debts that Epira was supposed to have erased but never did. All these have transpired while the oligarchs have not paid $10 billion of what they owe government for these privatized assets.
The current Speaker, Sonny Belmonte, when pressed for a response to the crescendo of complaints from Mindanao lawmakers, said, “We have to investigate (the power crisis) to know what is going on.” Let’s see when the investigation will start and how far it will go (considering who the distribution source of the Epira payola in 2001 really is).
Still, on a slightly positive note, despite the elder Sen. Nene Pimentel’s signing of the Epira, we are hopeful that the younger Pimentel will take up the energy cause in the Upper Chamber this time. My only criticism is that he may have weakened his position when he stated, “If I need to personally beg to Senator Osmeña to hold the inquiry before the Holy Week break, I will have to.”
Why even beg, Koko? Your duty lies with the people and no one else.
(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., after Lent, on “Mindanao power blackmail? Part II;” visit http://newkatipunero.blogspot.com for our articles plus TV and radio archives)
Friday, March 30, 2012
Thursday, March 29, 2012
Dump Serge, Dina
DIE HARD III
Herman Tiu Laurel
3/26-4/1/2012
The manipulated power crisis in Mindanao was created by the oligarchs and their minions.
Their minions include the Department of Energy (DoE), the Power Sector Asset and Liabilities Management (Psalm), the Energy Rgulatory Commission (ERC) and other similar entities.
The Mindanao power crisis has been a painful disaster for the economy of Mindanao, but it has also been a blessing in disguise as it awakened the country to the criminal character of the ruling oligarchs and the Epira law they pushed through the corrupt Philippine Congress over 10 years ago.
Readers of this column know that we have been exposing the scandalous power price blackmail of the past few years. They are being forced to accept exorbitant power prices by the DoE which has threatened to issue an order to force Mindanao electric cooperatives to buy power from Aboitiz's Therma Marine that's six times the normal 2.60/kwh rates in Mindanao.
Instead of complying the Mindanaoans have raised hell and they are getting the nation's attention now.
In a Manila Standard Today newspaper report by Christine Herrera last week headlined "Imperial Manila Noynoying," referring to the inaction of Malacañang to the power crisis in Mindanao, North Cotabato Gov. Emilou Talino-Mendoza charged that "intentional" four to eight-hour blackouts in Mindanao are being perpetrated "….because the Palace wants Mindanao to submit to its plan to privatize the hydrothermal power plants and to accept power barges from big business that charges exorbitant fees of P14 a kilowatt hour."
The report continued to say that Gov. Talino-Mendoza found it difficult to explain to her people why they were experiencing long blackouts when the province is host to the Mt. Apo Geothermal Power Plant being run by the Lopezes.
The governor said that today, four big businesses are involved in generating and distributing power in Mindanao: the Lopezes, the Ayalas, the mall mogul Henry Sy (actually Jr.) and the Aboitizes, who she said are all "friends" of President Benigno Aquino III.
The courageous governor says: "The Palace, the Department of Energy and Energy Regulatory Commission are Noynoying in Manila, while our people here are also forced to do Noynoying because they have nothing to do and are helpless about the blackouts that hit us everyday…"
General Santos City Mayor Darlene Antonino-Custudio also joined the governor in the call against privatization of the Mindanao hyrdro-power assets and demand for a congressional investigation.
In the Senate, Chiz Escudero and Koko Pimentel have called on senate energy committee chair Serg Osmeña to launch an investigation.
Inn the Lower House, party list Cong. Angelo Palmones, Rep. Rufus Rodrigues of Cagayan de Oro and Vicente Belmonte of Iligan have called on the House energy counterpart Dina Abad to respond to the issues being raised.
Senator Sergio Osmeña III, chairman of the Senate committee on energy, vowed to conduct the probe but not before blaming Gloria Arroyo for the crisis.
Dina Abad, a Lopez minion, has kept quiet.
Serge Osmeña has spoken, alleging that Gloria Arroyo had been in the habit of compelling Napocor to reduce power prices to window dress her performance.
From all the historical facts that anyone can easily find on the Internet, Gloria Arroyo was forced on several occasions to do this because the Epira law that privatized the power sector and open it to the greed and abuses of the oligarchs caused power rates to shoot up to become the "highest power rates in Asia."
Arroyo is not without fault as the Epira was one of the concessions she was required to give to get the support of the oligarchs and its foreign partners in Edsa II.
We put on written record here, as it was stated by our GNN show guest and former Freedom from Debt Coalition (FDC) energy committee advocate Wilson, that Gloria Arroyo sought to stop the FDC from opposing the Epira; likewise Arroyo suppressed the exposé of the Partido Manggagawa congressman Renato Magtubo of the P500,000 payola through Sonny Belmonte to pass the Epira.
"The power rates in Mindanao have been politicized," Herrera quotes Osmeña, "This is why the Epira Law mandates the sale of Napocor's plants to the private sector, so that the private owners will not have to compete with government plants whose rates can be subsidized."
But what is wrong with government providing low and affordable rates to the public and why is Serg Osmeña so concerned with the private owners profit concerns and not the power consuming public that are adversely damaged by the high power rates the privatized power plants "private owners" are charging?
Obviously it is because Serg Osmeña is part of the Meralco-Lopez family and is seated in the energy committee to protect the oligarchs' interest and not the nation.
The Epira defenders like the Malaya editorial of March 22 point to Davao City which did not have blackouts during the crisis, but the generation cost there are double or almost double the areas hit by the crisis.
Gov. Talino-Mendoza said: "Davao's power generation is owned by the Ayalas and the distribution is also owned by the Ayalas. They wanted us to give up also the power distribution to the Lopezes, who now run the Mt. Apo Geothermal Plant," and Mt. Apo Geothermal Plant could generate 98 megawatts and North Cotabato's system peak demand was only at 38 megawatts, "… yet we contend with eight-hour blackouts everyday."
North Cotabato was negotiating with the Lopezes to reduce the cost of power to P3.50 per kilowatt hour from P4.11 when the blackouts started hitting it.
Talino-Mendoza said then: "We were told to accept power barges owned by big business that charges us P14 per kilowatt hour."
If North Cotabato accepts these rates today, they will be tied to them for the next 20 years as that is the duration of the contract, precisely the same type of con game and swindle the oligarchs and the corrupted DoE and ERC gave blessings to in Luzon and the Visayas.
At this writing, to try to resolve the irate Mandanaons' rebellion, Malacañang's Noynoy hints leasing the Aboitiz's Therma Marine power barges which it acquired for $30 million and turned around and assessed at $ 80 million as rate base to charge the P 14/kwh rate.
So, we ask Serge Osmeña: Isn't this the public capitalizing and subsidizing the oligarchs; a case of socialism for the rich and the risk and pains capitalism for the rest of us ordinary mortals?
This morning as I write ERC spokesman Saturnino Juan is lying through his teeth over DWIZ's Karambola to cover up the grandiose con game of the oligarchs, the corrupt politicians and captured Cabinet offices and regulatory agencies.
We are thankful the show then called up Mr. Jojo Borja to expose and denounce the lies of the ERC and its spokesperson right there and then.
At this writing, the Mindanoans are also filing a P 5-billion class suit against the government power executives in this power mess.
In Luzon, we must launch a movement to oust Serge Osemña and Dina Abad from their respective energy committees so the scandals may be truly investigated.
(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., on "Mines: Bombs or Boon?"; visit http://newkatipunero.blogspot.com for our articles plus TV and radio archives)
Their minions include the Department of Energy (DoE), the Power Sector Asset and Liabilities Management (Psalm), the Energy Rgulatory Commission (ERC) and other similar entities.
The Mindanao power crisis has been a painful disaster for the economy of Mindanao, but it has also been a blessing in disguise as it awakened the country to the criminal character of the ruling oligarchs and the Epira law they pushed through the corrupt Philippine Congress over 10 years ago.
Readers of this column know that we have been exposing the scandalous power price blackmail of the past few years. They are being forced to accept exorbitant power prices by the DoE which has threatened to issue an order to force Mindanao electric cooperatives to buy power from Aboitiz's Therma Marine that's six times the normal 2.60/kwh rates in Mindanao.
Instead of complying the Mindanaoans have raised hell and they are getting the nation's attention now.
In a Manila Standard Today newspaper report by Christine Herrera last week headlined "Imperial Manila Noynoying," referring to the inaction of Malacañang to the power crisis in Mindanao, North Cotabato Gov. Emilou Talino-Mendoza charged that "intentional" four to eight-hour blackouts in Mindanao are being perpetrated "….because the Palace wants Mindanao to submit to its plan to privatize the hydrothermal power plants and to accept power barges from big business that charges exorbitant fees of P14 a kilowatt hour."
The report continued to say that Gov. Talino-Mendoza found it difficult to explain to her people why they were experiencing long blackouts when the province is host to the Mt. Apo Geothermal Power Plant being run by the Lopezes.
The governor said that today, four big businesses are involved in generating and distributing power in Mindanao: the Lopezes, the Ayalas, the mall mogul Henry Sy (actually Jr.) and the Aboitizes, who she said are all "friends" of President Benigno Aquino III.
The courageous governor says: "The Palace, the Department of Energy and Energy Regulatory Commission are Noynoying in Manila, while our people here are also forced to do Noynoying because they have nothing to do and are helpless about the blackouts that hit us everyday…"
General Santos City Mayor Darlene Antonino-Custudio also joined the governor in the call against privatization of the Mindanao hyrdro-power assets and demand for a congressional investigation.
In the Senate, Chiz Escudero and Koko Pimentel have called on senate energy committee chair Serg Osmeña to launch an investigation.
Inn the Lower House, party list Cong. Angelo Palmones, Rep. Rufus Rodrigues of Cagayan de Oro and Vicente Belmonte of Iligan have called on the House energy counterpart Dina Abad to respond to the issues being raised.
Senator Sergio Osmeña III, chairman of the Senate committee on energy, vowed to conduct the probe but not before blaming Gloria Arroyo for the crisis.
Dina Abad, a Lopez minion, has kept quiet.
Serge Osmeña has spoken, alleging that Gloria Arroyo had been in the habit of compelling Napocor to reduce power prices to window dress her performance.
From all the historical facts that anyone can easily find on the Internet, Gloria Arroyo was forced on several occasions to do this because the Epira law that privatized the power sector and open it to the greed and abuses of the oligarchs caused power rates to shoot up to become the "highest power rates in Asia."
Arroyo is not without fault as the Epira was one of the concessions she was required to give to get the support of the oligarchs and its foreign partners in Edsa II.
We put on written record here, as it was stated by our GNN show guest and former Freedom from Debt Coalition (FDC) energy committee advocate Wilson, that Gloria Arroyo sought to stop the FDC from opposing the Epira; likewise Arroyo suppressed the exposé of the Partido Manggagawa congressman Renato Magtubo of the P500,000 payola through Sonny Belmonte to pass the Epira.
"The power rates in Mindanao have been politicized," Herrera quotes Osmeña, "This is why the Epira Law mandates the sale of Napocor's plants to the private sector, so that the private owners will not have to compete with government plants whose rates can be subsidized."
But what is wrong with government providing low and affordable rates to the public and why is Serg Osmeña so concerned with the private owners profit concerns and not the power consuming public that are adversely damaged by the high power rates the privatized power plants "private owners" are charging?
Obviously it is because Serg Osmeña is part of the Meralco-Lopez family and is seated in the energy committee to protect the oligarchs' interest and not the nation.
The Epira defenders like the Malaya editorial of March 22 point to Davao City which did not have blackouts during the crisis, but the generation cost there are double or almost double the areas hit by the crisis.
Gov. Talino-Mendoza said: "Davao's power generation is owned by the Ayalas and the distribution is also owned by the Ayalas. They wanted us to give up also the power distribution to the Lopezes, who now run the Mt. Apo Geothermal Plant," and Mt. Apo Geothermal Plant could generate 98 megawatts and North Cotabato's system peak demand was only at 38 megawatts, "… yet we contend with eight-hour blackouts everyday."
North Cotabato was negotiating with the Lopezes to reduce the cost of power to P3.50 per kilowatt hour from P4.11 when the blackouts started hitting it.
Talino-Mendoza said then: "We were told to accept power barges owned by big business that charges us P14 per kilowatt hour."
If North Cotabato accepts these rates today, they will be tied to them for the next 20 years as that is the duration of the contract, precisely the same type of con game and swindle the oligarchs and the corrupted DoE and ERC gave blessings to in Luzon and the Visayas.
At this writing, to try to resolve the irate Mandanaons' rebellion, Malacañang's Noynoy hints leasing the Aboitiz's Therma Marine power barges which it acquired for $30 million and turned around and assessed at $ 80 million as rate base to charge the P 14/kwh rate.
So, we ask Serge Osmeña: Isn't this the public capitalizing and subsidizing the oligarchs; a case of socialism for the rich and the risk and pains capitalism for the rest of us ordinary mortals?
This morning as I write ERC spokesman Saturnino Juan is lying through his teeth over DWIZ's Karambola to cover up the grandiose con game of the oligarchs, the corrupt politicians and captured Cabinet offices and regulatory agencies.
We are thankful the show then called up Mr. Jojo Borja to expose and denounce the lies of the ERC and its spokesperson right there and then.
At this writing, the Mindanoans are also filing a P 5-billion class suit against the government power executives in this power mess.
In Luzon, we must launch a movement to oust Serge Osemña and Dina Abad from their respective energy committees so the scandals may be truly investigated.
(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., on "Mines: Bombs or Boon?"; visit http://newkatipunero.blogspot.com for our articles plus TV and radio archives)
Monday, March 26, 2012
Abetting power blackmail
DIE HARD III
Herman Tiu Laurel
3/26/2012
Anger over the power price issue now erupting in Mindanao is one that this country has not seen since the initial outbursts against the power purchase agreements in Metro Manila almost a decade ago.
North Cotabato Gov. Emilou Talio-Mendoza, for instance, has made direct hits at three power oligarchs operating in Mindanao. Without mincing words, she accused them of engineering intentional power shortages to force Mindanao to accept the privatization of the vast Agus-Pulangi hydroelectric complex, where the cost of generation is less than P0.01 per kilowatt-hour (kWh) given the systems full depreciation. What privatization will do is bring about high power rates, which is what the oligarchs and multilateral financial agencies intend for Mindanao. Good thing she was joined by General Santos City Mayor Darlene Antonino-Custodio in opposing this move.
As expected, privatization advocates are pinning the blame on those who oppose power privatization. The March 22 editorial of Malaya, for example, argues that Davao City, which accepted privatization, does not experience blackouts. What they refuse to highlight is that power rates in Iligan City and the larger province of Lanao del Norte, where power outages frequently occur, hover at P6.56/kWh, compared to Davaos independent power producer (IPP) rates of P8.75/kWh that are at least 25 percent higher.
Evidently, their logic is that people can get uninterrupted power, but at the oligarchs price. Its nothing short of blackmail.
Its good that Iligan Citys residents have refused to sign the 20-year IPP contracts that aim to tie them to exorbitant power rates because they know that the current power shortages, which can be abated with the optimization of hydroelectricity, are merely artificial and short-term.
But absurd as the situation already is, blackmail rates in Mindanao are not even uniform. In North Cotabato, a Lopez company is reportedly asking P14/kWh for power from the already privatized Mt. Apo geothermal plants, which is dumbfounding given that the people are being made to choose between the blackouts and the high rates when the geothermal resource sits right in their province.
On the part of our legislators, there has been a growing clamor to look into the issue, too. But, even as such calls are made by Senators Chiz Escudero and Koko Pimentel or Representatives Vicente Belmonte, Rufus Rodriguez and Angelo Palmones, the chairmen of the respective Senate and House energy committees have been less forthcoming.
Serge Osmena, for one, blames Gloria Arroyo for politicizing the rates in yielding to populist demands by ordering the National Power Corp. (Napocor) to reduce its generation charge below costs, arguing that this is why the Epira (Electric Power Industry Reform Act) mandates the sale of Napocors plants to the private sector, so that the private owners will not have to compete with government plants whose rates can be subsidized.
Surely, given his position, Serge is well aware of several anomalies in the largely privatized Philippine power sector today, such as the Wholesale Electricity Spot Markets casino-like pricing that has yielded rates as high as P60/kWh from private IPPs; and yet he does nothing. Is that not a case of politicizing policies in favor of price gouging?
Kinship with a known oligarchic clan should have also disqualified Serge from his committee chairmanship due to conflict-of-interest; same with his House counterpart, Dina Abad, whose spouse is the author of the Omnibus Power Bill (precursor to the Epira). But, instead of declining for reason of delicadeza, these solons obediently follow the diktats of the oligarchs and the International Monetary Fund. Dina even kept on weighing down all proposed inquiries on the power issue for the past decade or so.
Strictly speaking, power rates have never been subsidized by government because consumers themselves have paid for these directly and not just as taxpayers. Funding for all the investments of Napocor is also sourced straight from the pockets of consumers and taxpayers. So whats all that talk about subsidies?
Privatization merely transferred consumers investments in state-owned power plants and, consequently, these plants surpluses or profits multiplied several times over to private pockets. The standard modus operandi is epitomized by the Aboitiz Groups purchase of Napocor Power Barges 117 and 118 three years ago for $30 million, which were then revalued at $80 million to form the basis of new rates worth P14/kWh.
In the same way, the intentional power crisis in Mindanao is aimed to force a privatization of the single biggest public asset there that can keep power rates down against the price predation of the power oligarchs. Sadly, successive Yellow regimes supported by the oligarchs (Cory, Ramos, Arroyo and PeNoy) have all done a Noynoying of the Agus-Pulangi by failing to dredge it at the very least, thereby reducing its generating capacity.
Meanwhile, captive government agencies continue to sell off Napocor assets for pitiful ditties while concocting efficiency formulas that give incentives to IPPs, raising their rates of return to as high as 17 percent, and allowing no-bidding on equipment and supplies purchases that are overpriced by up to 1000 percent. The Performance Based Regulation schemes three-year revaluation of all assets based on replacement value alone makes these asset values always go up (never to depreciate) and, as a result, the rate base as well.
The Epira was passed in 2001 after P500,000 individual payolas were allegedly circulated. Thereafter, the oligarchs legislative stooges were given free rein to stifle any questions or objections. Indeed, no progress can happen while they remain in their posts; but then, replacements must be thoroughly vetted by the public, too, lest the new ones proceed to milk the power oligarchs for their mutual benefit.
Amid all the gloom, the courageous Mindanaoans have already prepared a P5-billion class suit against government officials responsible for this intentional power crisis in Mindanao. My only advice: Make sure that the case does not land on the oligarchs assets in the judiciary, most especially those being bandied about by Malacaang and the Yellow media as cleaner than clean.
(Tune in to 1098AM, dwAD, Sulo ng Pilipino/Radyo OpinYon, Monday to Friday, 5 to 6 p.m.; watch Destiny Cable GNNs HTL edition of Talk News TV, Saturdays, 8:15 to 9 p.m., with replay at 11:15 p.m., after Lent, on Mining: Bomb or Boon?; visit http://newkatipunero.blogspot.com for our articles plus TV and radio archives)
Herman Tiu Laurel
3/26/2012
Anger over the power price issue now erupting in Mindanao is one that this country has not seen since the initial outbursts against the power purchase agreements in Metro Manila almost a decade ago.
North Cotabato Gov. Emilou Talio-Mendoza, for instance, has made direct hits at three power oligarchs operating in Mindanao. Without mincing words, she accused them of engineering intentional power shortages to force Mindanao to accept the privatization of the vast Agus-Pulangi hydroelectric complex, where the cost of generation is less than P0.01 per kilowatt-hour (kWh) given the systems full depreciation. What privatization will do is bring about high power rates, which is what the oligarchs and multilateral financial agencies intend for Mindanao. Good thing she was joined by General Santos City Mayor Darlene Antonino-Custodio in opposing this move.
As expected, privatization advocates are pinning the blame on those who oppose power privatization. The March 22 editorial of Malaya, for example, argues that Davao City, which accepted privatization, does not experience blackouts. What they refuse to highlight is that power rates in Iligan City and the larger province of Lanao del Norte, where power outages frequently occur, hover at P6.56/kWh, compared to Davaos independent power producer (IPP) rates of P8.75/kWh that are at least 25 percent higher.
Evidently, their logic is that people can get uninterrupted power, but at the oligarchs price. Its nothing short of blackmail.
Its good that Iligan Citys residents have refused to sign the 20-year IPP contracts that aim to tie them to exorbitant power rates because they know that the current power shortages, which can be abated with the optimization of hydroelectricity, are merely artificial and short-term.
But absurd as the situation already is, blackmail rates in Mindanao are not even uniform. In North Cotabato, a Lopez company is reportedly asking P14/kWh for power from the already privatized Mt. Apo geothermal plants, which is dumbfounding given that the people are being made to choose between the blackouts and the high rates when the geothermal resource sits right in their province.
On the part of our legislators, there has been a growing clamor to look into the issue, too. But, even as such calls are made by Senators Chiz Escudero and Koko Pimentel or Representatives Vicente Belmonte, Rufus Rodriguez and Angelo Palmones, the chairmen of the respective Senate and House energy committees have been less forthcoming.
Serge Osmena, for one, blames Gloria Arroyo for politicizing the rates in yielding to populist demands by ordering the National Power Corp. (Napocor) to reduce its generation charge below costs, arguing that this is why the Epira (Electric Power Industry Reform Act) mandates the sale of Napocors plants to the private sector, so that the private owners will not have to compete with government plants whose rates can be subsidized.
Surely, given his position, Serge is well aware of several anomalies in the largely privatized Philippine power sector today, such as the Wholesale Electricity Spot Markets casino-like pricing that has yielded rates as high as P60/kWh from private IPPs; and yet he does nothing. Is that not a case of politicizing policies in favor of price gouging?
Kinship with a known oligarchic clan should have also disqualified Serge from his committee chairmanship due to conflict-of-interest; same with his House counterpart, Dina Abad, whose spouse is the author of the Omnibus Power Bill (precursor to the Epira). But, instead of declining for reason of delicadeza, these solons obediently follow the diktats of the oligarchs and the International Monetary Fund. Dina even kept on weighing down all proposed inquiries on the power issue for the past decade or so.
Strictly speaking, power rates have never been subsidized by government because consumers themselves have paid for these directly and not just as taxpayers. Funding for all the investments of Napocor is also sourced straight from the pockets of consumers and taxpayers. So whats all that talk about subsidies?
Privatization merely transferred consumers investments in state-owned power plants and, consequently, these plants surpluses or profits multiplied several times over to private pockets. The standard modus operandi is epitomized by the Aboitiz Groups purchase of Napocor Power Barges 117 and 118 three years ago for $30 million, which were then revalued at $80 million to form the basis of new rates worth P14/kWh.
In the same way, the intentional power crisis in Mindanao is aimed to force a privatization of the single biggest public asset there that can keep power rates down against the price predation of the power oligarchs. Sadly, successive Yellow regimes supported by the oligarchs (Cory, Ramos, Arroyo and PeNoy) have all done a Noynoying of the Agus-Pulangi by failing to dredge it at the very least, thereby reducing its generating capacity.
Meanwhile, captive government agencies continue to sell off Napocor assets for pitiful ditties while concocting efficiency formulas that give incentives to IPPs, raising their rates of return to as high as 17 percent, and allowing no-bidding on equipment and supplies purchases that are overpriced by up to 1000 percent. The Performance Based Regulation schemes three-year revaluation of all assets based on replacement value alone makes these asset values always go up (never to depreciate) and, as a result, the rate base as well.
The Epira was passed in 2001 after P500,000 individual payolas were allegedly circulated. Thereafter, the oligarchs legislative stooges were given free rein to stifle any questions or objections. Indeed, no progress can happen while they remain in their posts; but then, replacements must be thoroughly vetted by the public, too, lest the new ones proceed to milk the power oligarchs for their mutual benefit.
Amid all the gloom, the courageous Mindanaoans have already prepared a P5-billion class suit against government officials responsible for this intentional power crisis in Mindanao. My only advice: Make sure that the case does not land on the oligarchs assets in the judiciary, most especially those being bandied about by Malacaang and the Yellow media as cleaner than clean.
(Tune in to 1098AM, dwAD, Sulo ng Pilipino/Radyo OpinYon, Monday to Friday, 5 to 6 p.m.; watch Destiny Cable GNNs HTL edition of Talk News TV, Saturdays, 8:15 to 9 p.m., with replay at 11:15 p.m., after Lent, on Mining: Bomb or Boon?; visit http://newkatipunero.blogspot.com for our articles plus TV and radio archives)
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