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Palace warned of massive nationwide protest, public outrage over unbridled

power rate hikes

By Charlie V. Manalo

DT-03/30/2012

The militant fisherfolk alliance Pambansang Lakas ng Kilusang Mamamalakaya ng


Pilipinas (Pamalakaya) yesterday warned President Aquino to better stop “noynoying”
around as the looming increase in electricity rates this May is inviting the Filipino people
to stage a nationwide electrifying protest and express their high voltage outrage if
Malacañang and the Energy Regulatory Commission (ERC) will not recall the power rate
hike.

“President Aquino is inviting a major political showdown with the people. Let us see
how this insensitive presidency of Mr. Aquino will fare against the collective outrage of
consumers across-the-nation,” said Pamalakaya national chairman Fernando Hicap in a
statement as he called on the Filipinos through consumer groups, sectoral and
multisectoral organizations to flood the ERC, the Department of Energy (DoE), the
Senate and the House of Representatives and the Office of the President with protest
and condemnation letters denouncing the latest hike in Napocor power rates.

Hicap said one to the demands of the people aside from stopping the May scheduled
increase in power rate is the indefinite suspension or urgent repeal of the Electric Power
Industry Reform Act (Epira) which the group said was a shotgun piece of legislation
that allowed the full liberalization and deregulation of the power industry in the country.

“The people should pursue this summer offensive against the privatization of electric
power industry, against power rate hike and for the urgent and unconditional repeal of
Epira law. It is time to send an earthshaking notice to a Noynoying presidency in
Malacañang,” Hicap added.

Hicap also dared President Aquino to issue an executive order calling for an indefinite
suspension of the increase in Napocor power rates and certify the urgent congressional
review and outright repeal of the 2001 Epira law.

The ERC on Wednesday allowed the state-run National Power Corp. (Napocor) to
increase its generation charges in Luzon, Visayas and Mindanao. The regulatory body
granted the petition for increases in generation charges by 69.04 centavos per kilowatt
hour (kwh) in Luzon, 60.60 centavos per kwh in the Visayas and 4.42 centavos per kwh
in Mindanao. At present, Napocor is charging consumers with P5.0160 per kwh in
Luzon, P4.0740 per kWh in the Visayas and P2.9321 per kwh in Mindanao.

Citing a study made by Bagong Alyansang Makabayan (Bayan), Pamalakaya said for
consumers, the most obvious impact of Epira is the unstoppable hike in monthly
electricity bills. From 2001 to 2010, for example, the average residential rate of the
Manila Electric Co. (Meralco) has increased by 112.5 percent. The generation charge of
Napocor for the Luzon grid has also risen by 86 percent during the same period.

The Pamalakaya leader said the unbridled hikes were courtesy of Epira which allowed
the continued collection of the notorious purchased power adjustment (PPA). Citing the
same study of Bayan, Hicap said the controversial PPA was a pre-Epira cost recovery
mechanism so that Napocor can increase its rates and pay its financial obligations that
stemmed from take-or-pay contracts with the IPPs. Take-or-pay, according to Bayan
study, means that Napocor will pay an IPP for a fixed capacity regardless if such
capacity was used or not. For consumers, it means that they pay for electricity that they
did not even use.

The same Bayan study showed under Epira, the PPA was just replaced with other
means of cost recovery. One is the generation rate adjustment mechanism (GRAM)
which Napocor recoups every quarter although the amount must be approved first by
the Energy Regulatory Commission (ERC).

Meanwhile, DUs that have their own IPPs like Meralco can automatically recover every
month the change in generation cost through the Automatic Adjustment of Generation
Rates and Systems Loss Rates (AGRA).

Aside from GRAM and AGRA, consumers are also being burdened by the Incremental
Currency Exchange Rate Adjustment (ICERA). Through the ICERA, hapless end-users of
electricity shoulder the losses of companies arising from fluctuations in the foreign
exchange.

To illustrate, if the cost of imported oil or coal used by generation companies went up
because the peso-dollar exchange rate rose, the increment will be paid by the
consumers. Like the GRAM, ICERA is recovered quarterly and needs ERC consent.

Bayan Muna Rep. Teddy Casiño called on the Palace for a drastic reversal of the
privatization and deregulation policy in the power industry, saying it is at the root of the
shortages and high electricity rates that has characterized the industry for the last two
decades.

“Our problems really started when the government started passing the responsibility of
building power plants to private corporations. This reached absurd heights during the
Ramos administration when Congress gave the former President emergency powers to
negotiate sweetheart contracts with private companies, resulting in onerous terms like
the take or pay conditions of the independent power plants (IPPs),” the lawmaker said.

Casiño said the problem was made worse by the Epira, mandating the total turnover of
public generating and transmission facilities to private companies.

“Today, we are at the total mercy of these powerful monopolies in the power sector
who have the ability to manipulate supply and other mechanisms to maximize their
profits. This is why we have the highest electricity rates in Asia,” Casiño stressed.

“The shortages that we have in Mindanao and other parts of the country favor the IPPs.
It justifies their high prices. It means bigger profits. Take note that private companies
enter the picture only when there is already a shortage because this is when they can
get the maximum price for their product,” he said.

“Unfortunately, the current proposal to give the President emergency powers to once
again enter into negotiated contracts with the IPPs just reinforces the problem. It is
more of the same thing. After 20 years, haven’t we learned anything?” he lamented.
Casiño is proposing instead that government temporarily take over at least two
privatized power barges in Mindanao using the constitutional provision on the takeover
of private utilities in times of emergency or when the public interest requires it. He said
the government can then run the barges as baseload power plants, producing cheaper
power that electric cooperatives can afford, thus significantly reducing the power
shortage.

He is also calling for the rehabilitation and expansion of government-owned


hydroelectric power plants in Mindanao and the tapping of small players for the joint
development of clean and renewable energy like geothermal, biomass and solar to
reduce the country’s dependence on expensive, imported fossil fuels.

“In other words, government should once again take the initiative in developing the
power sector. In the last 20 years, we have seen how total reliance on private
companies and the free market has resulted in chronic shortages and high prices. This
should stop. And the solution is not to give the President emergency powers to enter
into more private contracts,” Casiño said.

Serge’s Epira contradictions

DIE DT-03/30/2012
HARD
The electricity spaghetti hit the ceiling fan last week, and the stench of the
III
power oligarchs reeks all over the place. Now it’s not just electricity consumers
charging the oligarchs and their captive government officials with conspiracy;
Herman
local officials, such as North Cotabato Gov. Emilou Taliño-Mendoza and General
Tiu
Santos City Mayor Darlene Antonino-Custodio, are saying that the Mindanao
Laurel
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)

MINDANAO SUPPLY SHORTAGE SEEN SPREADING TO LUZON

Inaction may lead to power crisis in 2 years — Angara

By Angie M. Rosales

DT-04/02/2012

A bigger power crisis that will spread from Mindanao to Luzon is expected within two
years if the Aquino administration continues to vacillate on the needed policies to meet
rising power demand, Sen. Edgardo Angara yesterday said.
Reserve power supply in Luzon can still meet the rising demand but only until the next
two years, Angara said, as he expressed concern over the possibility of the Mindanao
power crisis spilling to other regions.

“If nothing is done, the crippling power crisis being experienced in Mindanao could shift
to Luzon in two years. It’s a rolling crisis,” the senator said, noting reports on power
supply problems projected as well in the Visayas region.

“If nothing is done, the demand will outspace energy supply,” Angara said as he urged
the Executive to expediate measures to oversee the full implementation of the
Renewable Energy law.

Former Sen. Juan Miguel Zubiri also warned of potential job losses as a result

of the persistent two-to four-hour daily brownouts in many parts of Mindanao.

“National agencies should find ways to help distressed economic sectors cope with the
constant brownouts,” Zubiri said.

“The Department of Labor and Employment in particular should ensure that the feared
dislocation of workers is minimized,” he said.

Citing National Grid Corp. of the Philippines (NGCP) data, Zubiri said that as of March
29, Mindanao had a power supply deficit of 187 megawatts (MW), or roughly 15
percent of peak system demand.

The power-intensive industries hurt by the recurring brownouts include food processing
and canning; rice, corn and coconut milling; construction; metal die casting; and the
manufacture of steel, chemicals, cement and paper, Zubiri said.

While local industries are looking to expand and foreign investors are set to come in,
demand for electricity is expected to keep rising, Angara pointed out.

“The reserve power supply in Luzon can still meet rising demand for two years,
although we are not also sure about that. But in Mindanao and the Visayas definitely
there is a shortage,” he said.

The situation calls for immediate action and government should waste no time in
managing the power supply deficit to avert rolling brownouts in Mindanao where no
new power plants were put up in the past years to anticipate the problem.

Such inaction somehow led to the the shortage crisis in Mindanao and it would not have
been the situation had the government implemented the Renewable Energy Law four
years ago “when there was $5 billion worth of investments in RE and $1 billion was
ready to be put up for hydro, bio gas and solar power,” Angara said.

He said the government, however, took too long to adopt the so-called feed-in tariff
scheme which would have helped provide stable power prices through long-term
contracts with RE investors where generation tariff (FIT rates) is paid for every kilowatt-
hour produced. Its proponents cited FIT rates in the Europe, for instance, which provide
guaranteed grid access with long-term (15-25 years) contracts for produced power and
purchase prices are based on cost of generation of RE plants.
“But RE investors would not come in if they don’t know how much would be the price of
the energy they would generate from RE plants but the Department of Energy (DoE)
panicked about the potential taxes that will be lost,” he said.

“If not for this combination of shortsightedness and slowness of the bureaucracy, we
would not be having this supply problem,” he added.

Unfortunately, he said the prospective RE investors have opted to move to Indonesia


and Thailand there was no assured rates of return as provided under the FIT rate
scheme.

“It’s a pity, because the $1 billion investment on RE plants from Europe was already set
to come in. if that happened, we would not be too dependent on the volatile Middle
East oil supply situation,” Angara said.

The senator also pointed out that substantial investments in RE projects would have
provided the power supply buffer and the Philippines would not be heavily reliant on
expensive imported oil supply to run existing power generation plants.

Still, he said the Aquino administration, particularly Energy Secretary Jose Rene
Almendras, is not solely to blame because the problem has been pestering long before
President Aquino came to power in 2010.

Angara also commended Almendras for his “vision and boldness” but slammed the
Department of Finance for its narrow minded view for worrying only about government
revenue from energy investors without considering the urgency of the power supply
situation.

In the current Mindanao supply problem, shopping malls and other commercial
buildings that rely heavily on ventilation and cooling have also been affected, according
to Zubiri.

“Agricultural plantations and fishing operations that depend on mechanization and cold-
storage have likewise been dampened down,” Zubiri said.

Even the petroleum and water industries have been impaired, since they depend on
electricity to drive pumping operations, he pointed out.

“In fact, in some communities, access to household, irrigation and industrial water has
been reduced due to the brownouts,” he added.

Zubiri said he was not worried about mining companies, which have their own power
stations to service their electricity requirements.

The DoE previously said it does not expect a permanent solution to Mindanao’s power
shortage until some 258 MWs of additional generating capacity are installed by 2014.

Zubiri earlier warned of “catastrophic” brownouts in Mindanao lasting up to eight hours


daily by April, due to higher demand for electricity associated with the summer season.

Salivating for Agus-Pulangi

DIE
HARD DT-04/02/2012
III
Jojo Borja, one of the major owners of Iligan Light and Power who is at the
forefront of the crusade to expose the anomalies of the power privatization
Herman
caper, reports that a number of his Mindanao colleagues got wind of broadcast
Tiu
interviews where Serge Osmea called for the privatization of the Agus-Pulangi
Laurel
hydroelectric complex. As such longstanding anomalies are a direct result of
the Electric Power Industry Reform Act (Epira), a law that gave rise to the
Energy Regulatory Commission (ERC) and Power Sector Assets and Liabilities
Management (Psalm) Corp., one of Borjas sources, a Psalm executive, naturally doesnt
want to be named.

Mindanao is ultra-sensitive to any suggestion of privatizing its treasure that is the Agus-
Pulangi complex. As the people there know that greedy and dirty hands are just waiting
to grab this wonder of Mindanao away from them, a mere mention of it would be
absolutely revolting.

According to Freedom from Debt Coalition (FDC)s Wilson Fortaleza, who just came from
a National Power Corp. (Napocor) Union-sponsored review of Agus-Pulangi, the
hydroelectric plants there (which started operations in 1953) are by now fully
depreciated. Thus, the electricity that is produced is less than P0.01 per kilowatt-hour
(kWh).

It is easy to understand Mindanaos aversion to privatization. During the past weeks


power crisis in Mindanao, some prominent local officials have cited the privatization of
Mt. Apo Geothermal to a Lopez company as an issue. Geothermal energy, according to
the Center for Energy and Climate Solutions, should only cost anywhere between $0.01
to $0.05/kWh, or from P0.42 to P2.00/kWh on todays exchange rate. But North
Cotabato Gov. Emilou Talio-Mendoza and General Santos City Mayor Darlene Antonino-
Custodio assert that the private Lopez firm charges a walloping P14/kWh of electricity.

In making his case against government-run power, Senator Osmea said in a March 29
interview that Because government tries to lower the price of electricity a president can
order power rates to be lowered to become popular. The case of Mt. Apo Geothermal,
however, only shows that privatization has resulted in the population being blackmailed
with price gouging rates while the oligarchs sit back and watch the regions economy
face disaster without concern.

If we go by Osmeas logic, then government must not and should not be concerned
about the peoples welfare; government should make only the power oligarchs interests
topmost in its priorities; and government need not bother with the welfare of the
national economy where industries that have to bear the highest power cost in Asia can
no longer compete with other countries.

Mindanao Development Authority (MinDA) chief Lualhati Antonino expressed a deeper


suspicion: That the privatized transmission company now called the National Grid Corp.
of the Philippines (NGCP) is creating this power crisis to force a privatization of the
Agus-Pulangi on the pretext that government has failed.
The likely scenario is that, upon privatization, the Agus-Pulangis less than P0.01/kWh
electricity will be sold to Luzon and Visayas for P5.00/kWh when the NGCP lays the
submarine cables to link the Mindanao grid back to the islands northward.

Antonino states: I am sorry to say that based on my studies and the researches of my
office, I think NGCP is fooling us Where are the power generated by the hydroelectric
power generators?... I dont believe it. NGCP is creating an artificial shortage. Niloloko
nila tayo (They are fooling us)

International observers today confirm what the Executive Intelligence Review (EIR)
reported years ago: Under President Corazon Aquino, no new energy generating
capacity was added (and) since the 1993 Ramos emergency measures, the cumulative
amount of loot that these forces took out of Napocor (totaled) an estimated $2.5 billion
to $4 billion, if not more (As this was estimated years ago, it should now stand at $10
billion.)

To continue, the EIR explains (in its article, The Lessons of California and Brazil) that
Companies such as Enron, Reliant Energy bid up the price of electricity on the California
Electricity Spot Market (like our own Wholesale Electricity Spot Market or Wesm)
(driving) up the average price (by) more than a 1,000 percent. It further states that
The Philippines Power Reform Bill replicates all the key destructive features of
California.

Malacaang resident Noynoyer, PeNoy Aquino, has not offered any solution to the
Mindanaoans pleas, except that they should expect contracting power barges that
would result in higher electricity rates, saying, You will have to share the burden But
would the people and consumers of Mindanao share in the profit, too? No way: Thats
because in PeNoys world, profits are only for the oligarchs while the entire burden
should be for the consumers.

With the Agus-Pulangi still in public hands, all the people are able to share in the
bounties flowing from it. If only government ceases to be captive to the oligarchy, the
bounties from renewable power in Mindanao and everywhere in the Philippines can be
multiplied a hundred fold. But, as our sad experience with the Electric Power Industry
Reform Act (Epira) tells us, we, the people, must now wait no longer in junking that
privatization law to restore the public sectors control of our countrys economic affairs,
particularly electricity generation and distribution. Once this is achieved, government
can proceed to prioritize more mini and micro-hydro and geothermal development
instead of fossil fuel energy.

We shall end with the latest confirmation of the Philippines highest power cost in Asia
from the 2011 comparative survey of the Japan External Trade Organization: Manila at
$0.23/kWh; Tokyo and Singapore at $0.20/kWh; Sydney at $0.19/kWh; Colombo at
$0.18/kWh; Mumbai at $0.16/kWh; Phnom Penh at $0.15/kWh; Hong Kong at
$0.14/kWh; Auckland and Taipei at $0.12/kWh; Kuala Lumpur and Karachi at
$0.11/kWh; Shenzhen and Chennai at $0.10/kWh; and Jakarta, Shanghai, Guangzhou,
and New Delhi at $0.09/kWh.

The survey also confirms what our colleague Butch Junia has always stressed: That
contrary to claims by Osmea of government subsidizing power rates, the reason
Philippine commercial/industrial rates are not the highest in Asia yet is that these are
subsidized by residential consumers, who, even while consuming only 30 percent of the
Manila Electric Co.s distributed electricity, contribute to 67 percent of the power
companys income by shouldering incredibly high and lopsided rates. Thats subsidy for
you, Serge!

(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 Mindanao power blackmail? Part II; visit
http://newkatipunero.blogspot.com for our articles plus TV and radio archives)

Stop-gap Noy solution to power woe means higher Mindanao rates

By Angie M. Rosales

DT-04/03/2012

Power consumers in Mindanao will have to bear electricity rates that are higher by as
much as 50 centavos per kilowatthour with the government’s plan to use power barges
which uses expensive fuel as a stop-gap solution to the brewing power crisis in the
region, Sen. Sergio Osmeña III said yesterday.

“The people of Mindanao have to accept that they will have to face higher rates, a little
bit higher, by about 50 centavos,” Osmeña said, noting the need to adjust the current
P3.70 per kilowatt hour (kwh) to P4.20 per kwh to address the power supply problem
immediately.

Besides the impending rate increase, the chairman of the Senate energy committee,
also said that the possible solution for the meantime to plug the power supply shortage
in Mindanao could be answered by the so-called combined cycle gar turbine (CCGP).

The power barges are designed for emergency uses, which is what Mindanao needs at
the moment, Osmeña said.

“Now that they need emergency power supply, it’s like they’re

in ICU (intensive care unit) already, they will have to make do first, temporarily for
about two years, with CCGP of about P9 per kwh. But that will only take up about 10-
percent of their consumption,” he said.

“So, if it is blended with the average rate, it will go up from about P3.70/kwh to
P4.20/kwh. And they are always complaining. But we cannot do anything about it now.
They want (the government to) subsidize but those in Luzon and the Visayas are no
longer being subsidized,” Osmeña added.

“These are barges that you will use for one to two hours, not more than four hours, a
day. That’s because they are expensive. But if you’re only using it for two to four hours
a day, you have to blend it with the regular rate and you will see in your bill the
average that you pay per kilowatt hour, which will come out to about P4.20 if you use
them. If not, they are about P3.70/kwh because there are diesel plants there. The
cheapest there is P2.90/kwh, water is hydro, that comes from Angus at Pulangi (power
plants). ‘What they use as coal and diesel, the price has gone up to P3.70/kwh which is
the average,” he explained.

The senator, who is also co-chairman of the Congressional Commission overseeing


implementation of the Electric Power Industry Reform Act (Epira), said the increase in
rates would not be so high had there been coal plants in Mindanao shortly after the law
was put into place more than a decade ago.

He pointed out that when the Epira was enacted into law, the government scrapped the
per grid subsidy.

“Before the Epira, those in Manila subsidize the rest of Luzon. There is an add-on in the
bills of about 24 centavos. The rest of Luzon, in turn, subsidizes the rest of Visayas and
Mindanao. This was removed to pave the way for competition and true cost of power to
reflect in the power bills,” he said.

It is for this reason that during his senatorial campaign in 2010, he had repeatedly
warned concerned officials of Mindanao of the looming power crisis in the island.

The senator said that during the term of President Fidel Ramos, Congress passed the
Emergency Power Crisis Act allowing the government to contract for new plants without
bidding. “We had a problem then because the contracts were over-priced and double
ordered at the same time. So, the Philippine economy received a double whammy, then
we had a controversy over the purchase power cost, IPPs — independent power plants,
which we have to pay for even if we don’t use it.”

He said that in Mindanao, because government still owns about 60 percent to 70


percent of the total output, supply problem will still set in.”

“The power industry has to be planned 10 to 20 years in advance. It takes 3 to 5 years


to build a plant. From concept, land preparation, getting all the permits, signing up the
contract, getting financing and construction. But now that there is a real power
shortage as he warned earlier, Osmeña said the people of Mindanao are blaming the
government.

Malacañang, meanwhile, debunked reports that a bigger power crisis is expected to hit
Luzon within the next two years if the Aquino administration continues to vacillate on
the needed policies to meet rising power demand.

According to deputy presidential spokesman Abigail Valte, the Department of Energy


has reported an “average excess supply of 2000 megawatts (MW) in Luzon even at
peak hours.”

“Visayas is able to export 200-plus MW to Luzon if required for augmentation,” Valte


said.

She likewise pointed out that the DoE is expecting committed capacities in Luzon to
come online at the end of the year.

“DoE has also approved around 2000 MW of hydro power service contracts and
continues to process renewable energy project applications which will go online as per
work program commitments at different periods,” Valte reported.
Bayan Muna Rep. Teddy Casiño also is proposing a novel solution to the Mindanao
power shortage and the impending power crisis in Luzon - build a million solar powered
roofs in 10 years.

Casiño, author of House Bill 5405 or the proposed One Million Solar Roofs Act, said that
Congress should fast track the bill which provides incentives and financing facilities to
ordinary electricity consumers like residences, offices and small to medium business
establishments who want to put up their own solar power systems.

Casiño’s bill will allow homeowners and entrepreneurs to take out loans from Pag-Ibig,
GSIS, SSS and other financial institutions to purchase solar panels and pay the amount
from the ensuing savings in their electricity bills.

“In this way, we hit three birds with one stone - we build additional supply of power;
liberate ourselves from expensive, dirty and imported fossil fuels; and develop the local
renewable energy industry. It is really the way to go,” he said.

According to the lawmaker, “Government should think out of the box and go beyond
the big developer mentality in dealing with the power crisis. Solar power technology
now allows electricity consumers to be producers themselves. So rather than giving the
President emergency powers to ink sweetheart contracts again with the big players,
why not empower consumers to produce their own energy through solar power? “

“Our bill also allows these solar powered households and small firms to feed in their
unused power to the grid during peak midday hours at a cost cheaper than existing
diesel peaking plants. In the National Capital Region (NCR), some peaking plants sell at
as high as P30/kWh while solar can come in at half that price,” Casiño revealed. Charlie
V. Manalo, Rocky Nazareno

Noynoying also cause of power crisis

EDITORIAL DT-04/03/2012

The power crisis in Mindanao would have been averted with the simple
Click to
virtue of foresight and priority setting from the current occupants of
enlarge
Malacaang.

That in gist was how Sen. Edgardo Angara described the current power quandary that
Noynoy has found himself in the two years into his presidency.

While others were saying that the crisis is artificial and conjured up to benefit the
business associates of Noynoy who are seeking part of the action in the setting up of
coal-fired power plants in the region, still some say that inaction or what has become a
patented word called Noynoying was to blame for the power shortage.

Whatever the reason for it, however, it would seem that one way of the other, the
administration of Noynoys poor handling of the situation has resulted in the crisis
situation.

Angara said that about $1 billion worth of local renewable energy (RE) projects, some
of them in Mindanao were turned off by the delay in the feed in tariff (FIT) rates that
investors need to determine the rates at which they can sell the electricity that they
generate.

The lack of the guidelines for the FIT rates resulted in the potential investors to move
to Indonesia and Thailand where the rules are clearer.

Angara said if not for Finance Secretary Cesar Purisima worrying too much about the
government share on the RE projects, the crisis would have likely been averted.

If not for the combination of shortsightedness and slowness of the bureaucracy, we


would not be having this supply problem, according to Angara.

Its either Purisima worries too much about lost tax opportunities or that the interest of
those behind Purisimas back dictates that he drags his foot on the approval of the
implementing rules on the FIT rates.

The FIT is a form of a subsidy to RE projects but the finance department wants the
incentives to be calibrated in relation to other incentives such as tax holidays that
delayed the implementation of the scheme.

The $1 billion in investments would be equivalent to around 1,000 megawatts of


electricity that would have easily solved the current electricity supply shortage twice
around. Angara said the investments were supposed to be part of a total $5-billion RE
investments plan for the country.

Now these projects have dissolved into thin air as a result of the lethargic decision-
making in the Palace.

It would seem that Noynoying in the power industry at least has a purpose even if
sinister since allowing the RE projects to lapse lays the ground open for more
conventional power plants such as coal plants, where the costs are higher and so are
the commissions and kickbacks.

Also the fuel for these plants is at the same time, perpetual sources of bribes that are
collected as long as these power plants exist.

It would have been possible that the proponents of these power plant projects and
those seeking to rehabilitate existing hydroelectric plants are those who are putting
roadblocks to the speedy approval of the guidelines for RE projects.

Considerations about upholding the straight path or making a show of it while at the
same time giving Noys business cronies good slices of the power supply industry in
Mindanao could be taking its toll on policymaking since the interests of the two are
usually opposed to each other.

The power problem thus has the potential of spreading to the more developed parts of
the country such as in Metro Manila if the same policy direction is taken by Noynoy
through the advice of Purisima.

Pleasing both Filipinos, which Noynoy calls his boss, and his true masters, which are big
business concerns would be a tough nut to crack.
Many may see it as Noynoying but behind the supposed lethargy could be a sinister
purpose of favoring his business associates.

Either way, the country is in for a tough ride.

Sale of hydro plants may lead to unrest

MST-Monday, 02 April, 2012 Written by Rio N. Araja

A PLAN to sell the Agus-Pulangui hydropower plants could trigger an uprising from the
Moro groups, the former and current employees of the National Power Corp. said
Monday.

Rabindranath Quilala, secretary general of the Buhayin ang Napocor Atin To or Banat,
told reporters they have been in constant touch with the Moro National Liberation Front
and the Moro Islamic Liberation Front that had been warning of social unrest if the sale
was pursued.

“That [sale] may lead to a bigger problem,” Quilala said.

“These hydropower plants are something they treasure very much.”

Quilala said the government must push for the rehabilitation of the two power plants
that had been providing cheap electricity in Mindanao instead of selling them.

Various non-government organizations belonging to Laban ng Mamamayan Para sa


Katotohanan at Katarungan have joined the calls for the government to address the
“artificial” power shortage in Mindanao.

“The power crisis in Mindanao is artificial. The situation here is not just all about the
lack of electricity but the high price of power,” a lawyer for the Trade Union Congress of
the Philippines, Hernani Nicdao, said.

Ghadzali Jaafar, vice chairman for political affairs of the MILF, said they wanted to help
solve the power crisis in Mindanao, but would resist the construction of the Pulangi
Dam 5 because it would submerge the burial grounds of the Monobos and the B’laan.”

“This fight against the construction of the dam is a legal fight and it doesn’t need arms
to deter it,” Jaafar said.

“The Monobos and the B’Laans have no arms and the MILF will not in any way entice
them to take up arms.” With Florante S. Solmerin

‘No power crisis, only situation’

MST-Tuesday, 03 April, 2012 Written by John Anthony Concepcion

DAVAO CITY — The blackouts lasting for six hours or more belie the Energy
Department’s claim that Mindanao only experiences 30 minutes to 2 hours of power
outages a day, says a resolution passed by the Kidapawan City Council.

Energy Undersecretary Josefina Patricia Asirit on Tuesday said that the media had
blown the power crisis in Mindanao out of proportions, claiming there were no 10, 12-
or 15-hour blackouts on the island during a pre-energy summit forum at the Grand
Regal Hotel in Davao City.

She refused to call the power shortage in Mindanao a “crisis” and referred to it as a
mere “situation” during a press conference after the forum.

The blackouts, she said, were lasting for no more than two hours, and that there were
no reports of outages lasting for six hours or more.

But a resolution passed by the Kidapawan City Council recently says the rolling
blackouts last seven hours and up to more than eight hours.

Resolution 12-117, passed on March 22, asks President Benigno Aquino III to intervene
and find a solution to the crisis that has affected Cotabato’s economy and the peace-
and-order situation in Mindanao.

The resolution says a previous city council resolution has already asked the National
Power Corp and the Power Sector Assets and Liabilities Management Corp. to allocate
more electricity for Cotabato but to no avail. Instead, the National Grid Corporation of
the Philippines lowered the province’s allocation to 22.2 megawatts when it needs 35
megawatts. That, the council says, resulting in power outages lasting for eight hours.

The Manila Standard’s reportorial team, which was in Kidapawan City on Monday,
experienced the blackouts in the city that lasted for six hours on that day.

The first blackout on Monday lasted for three hours, or from 11:30 a.m. to 2:30 p.m.
The next took place from about 7 p.m. to 10 p.m.

Even Alejandro Catacutan, the resident vice president of the Energy Development Corp.
that maintains the two Mt. Apo geothermal power plants, said his associates from South
Cotabato had confirmed to him that the blackouts were lasting for more than eight
hours.

The electric cooperatives in Mindanao opposed the planned privatization of the power
plants and power barges during the forum in Davao City.

The Association of Mindanao Rural Electric Cooperatives says the government should
put aside the privatization of power barges 101, 102, 103 and 104, which are scheduled
for bidding on May 16 of this year.

The planned privatization of the Agus and Pulangi hydro-electric plants should also be
deferred as it will help ease the power crisis in Mindanao without resulting in a drastic
spike in electricity prices, the group says.

Group president Sergio Dagooc told the forum that those power sources should be
rehabilitated to ease the power shortage in the region. If their privatization could not be
avoided, the government should at least incorporate safeguards to prevent a sudden
increase in the power rates.

Asirit said the position of the Mindanao electric cooperatives would be taken into
consideration when Energy Secretary Jose Rene Almendras met with local government
officials and the members of the House of Representatives from Mindanao to resolve
the power shortage.

Brics for progress

DIE DT-04/09/2012
HARD
The religious holidays are over and we’re back to the realities of the Filipino’s
III
deteriorating everyday life. Very soon — that is next month — electricity bills
reflecting yet another hike in the already highest power rate in Asia will
Herman
confront each and every power consumer anew. Meanwhile, as the Mindanao
Tiu
power crisis rages on despite the flurry of PR pronouncements about official
Laurel
action on the matter, government still declares that Mindanaoans must either
pay up or shut up in the darkness. One electric cooperative not standing down
on the blackmail was recently mentioned in an e-mail by our fellow power consumer
protectionist crusader, Jojo Borja, a major shareholder in Iligan Light and Power Inc.
(ILPI).

Borja relays that “According to Barangay Captain Mateo Cortez, who is also Vice
President of the Northern Mindanao Cooperative (Normic)… (at) a public hearing that
was attended by Napocor (National Power Corp.) and NGCP (National Grid Corp. of the
Philippines)… (but which) Psalm (Power Sector Assets and Liabilities Management
Corp.) did not attend… members of the 33 Rural Cooperatives of Mindanao… instead
opted for darkness as they refused to be blackmailed by Therma Marine Inc. (TMI) into
signing very expensive long-term Power Sales Agreements (PSA).”

However, “with the recent ‘orders’ of (Energy Secretary) Almendras that they must buy
(power from TMI)… they (have agreed) but only for one year to give Psalm enough
time to repair the four power barges (of Napocor),” adding that “If Aboitiz will insist on
a five-year take-or-pay contract… the cooperatives would rather choose the rolling
brownouts.”

“In the case of Iligan City,” Borja says, “the ERC (Energy Regulatory Commission)
already approved the PSA between Mapalad Energy Generation Corp. and ILPI. In spite
of (his appeals) to ERC that the consumers of ILPI own a 104-MW (power plant) and
that ILPI should not buy 2 units of 7.5-MW (megawatt) diesel, inefficient, obsolete
power generation plants at P400 million, ERC railroaded the approval of an additional
generation cost of P2.23 per kilowatt-hour (kWh) for the next 20 years — a rate that
will increase after the first year for cost overruns (similar to what TMI did) and every
three years thereafter as the value of the obsolete power plants will be reappraised as…
allowed by the Epira (Electric Power Industry Reform Act).”

The first part of the e-mail is self-explanatory; but what is striking is Normic preferring
the “rolling brownouts” over paying 50 percent additional to TMI which will provide the
electricity from two power barges the Aboitiz Group “bought” from Napocor-Psalm —
the two power barges reappraised from $30 million to $80 million to hike the rate base
for their electricity supply, to allow the selling of power at P11/kWh compared to the
normal P2.60/kWh in Mindanao.
The latter part highlights Epira’s distorted and corrupt consequences — in this case
Iligan City, which acquired the 104-MW BOT (build-operate-transfer) power plant from
the Alcantaras’ IPP (independent power producer) that was transferred back to Napocor
due to non-payment of real estate taxes. As the crisis wore on, Iligan wanted to
operate the plant. But for some unknown reason, ERC refused to give it provisional
authority and instead approved new capacity at a higher additional cost imposed for the
next 20 years.

It must be recalled that the 2001 Epira passage was an imposition of the (International
Monetary Fund) IMF and its subalterns, the World Bank (WB) and the Asian
Development Bank (ADB), in return for approval of stand-by and emergency loans of
around $1.2 billion. Today, we find ourselves entrapped in a vicious cycle of power
distortion and corruption created by Epira’s privatization and deregulation of power.

For this reason, the recent IMF pronouncements on “reforms” in the Philippines in this
second decade of the 21st Century merely smack of rank hypocrisy and deception.

Last March 20, the WB through its country economist for the Philippines issued
statements urging the Philippines to “speed up reforms,” saying “there should be
measures to lower power rates.” Well, they certainly would never say that these
measures are now improbable because of the convoluted rules made into law and
instituted by the Epira that make government itself helpless in the face of an escalating
crisis — that is, unless the Epira is repealed.

Let us be clear: An amendment to the Epira will just be a delusion since it is


privatization itself that is at the crux of the unjust law.

So you may ask: Why the title for this column? The answer will become clear once we
zero in on this welcome news: “Brics Bank to Rival World Bank and IMF and Challenge
Dollar Dominance.”

Brics (Brazil, Russia, India, China, and South Africa), in its recent meeting in India,
agreed to establish a “Brics Bank” that would fund development projects and
infrastructure in developing nations, in order to reduce dependence on the dollar by
conducting trade between the five nations in their own currencies, thereby positioning
these as internationally-traded currencies.

With the Brics bank, the Philippines in the future would no longer have to be dependent
on the exploitative conditionalities and policies of the IMF-WB-ADB three-headed hydra.

Finally, the multilateral financial institutions of the West will have competition and Third
World countries can have choices in sourcing financial support for development needs.

If only Brics were around in 2001, the Philippines may not have been entrapped in the
Epira nightmare.

Naturally, the Western press has not been happy with this development. Jeremy
Warner of London’s The Telegraph (in “Why a Brics-built bank to rival IMF is doomed to
fail”) writes: “Outside endemic corruption, uncertain or wholly absent rule of law, and
relatively low per capita income and life expectancy, there wouldn’t appear to be much
that unites this disparate collection of nations…” Well, news flash: Such statements
reflect more the true state of Wall Street, Obama, and the Eurozone now trapped in the
death throes of their financial crisis than anything 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., on “Fuel price crisis: Solutions” with consumer
advocate Dr. Amanda Cruz and FDC; visit http://newkatipunero.blogspot.com for our
articles plus TV and radio archives)

Expensive power deals sealed; Summit only for show — solon

By Charlie V. Manalo

DT-04/10/2012

President Aquino’s convening of the Mindanao Power Summit this Friday will only be for
show as agreements to jack up power rates in Mindanao and put up environmentally-
hazardous coal plants were already sealed during a pre-summit meeting organized by
the Department of Energy last week, Bayan Muna Rep. Teddy Casiño said.

Casiño aired his apprehension upon learning that in an April 4 pre-summit meeting in
Davao, Energy Secretary Jose Rene Almendras ordered Mindanao electric cooperatives
to buy expensive power from privatized power barges at P14 kilowatt hour (kWh), with
government shouldering the P9 per kWh diesel cost. Almendras also reportedly ordered
local government officials to immediately approve the environmental compliance
certificates (ECCs) for at least two new coal fired power plants in Mindanao.

“If that is the case then the power summit would just be a rubber stamp for DoE
circular DC 2012–03-0004 which forces consumers to pay an additional 50 to 80
centavos per kWh for their electricity due to the manipulations of favored private power
generators like Therma Marine, Inc. owned by the Aboitizes,” Casiño said.

“The summit is also meant to convince the people of Mindanao of the supposed need to
deploy more coal-fired and diesel power plants despite Mindanao’s abundance in clean
and renewable energy sources,” he lamented.

The lawmaker said he found it strange that government is willing to subsidize diesel
power at P9 per kWh when it would be cheaper and sustainable to subsidize solar and
other renewable energy sources.

“Is there a conspiracy to ram fossil-fuel power as the solution? Would this not reduce
the power summit to a farce, giving Mindanao consumers no choice but to stick to more
expensive, dirty, non-renewable power?” mused the solon.

Casiño also accused the DoE of blackmail for saying that Mindanaoans have to pay for
expensive, fossil-fuel based power or nothing at all.

“What makes Mindanao different from Visayas and Luzon is its rich potential for
renewable energy — from solar, hydro, geothermal to biomass. Why not tap these
instead of the more expensive and dirty fossil fuel technologies?” he stressed.
He described the impact of the government’s solution as heavy. “In terms of price, its
P50-P80 additional for those who consume 100 kWh per month, P100-P160 for those
who consume 200 kWh and so forth. This is on top of the approved increase by the
Energy Regulatory Commission (ERC) for Napocor generation rates” said Casiño.

Notwithstanding the possible risks, government should mull over all available options to
address the creeping power supply shortage crisis, including the use of nuclear power
as a long-term solution, Senate President Juan Ponce Enrile said, meanwhile, as he
urged Malacañang to consider the said option while cautioning against the possibility of
the power supply problem in Mindanao evolving into a national crisis if allowed to
worsen.

“Many are frightened (of nuclear power) but other countries have been benefiting from
this source of power, we have to take risks at some point,” he said.

“Now, nuclear power has the technology that is safe. We have to take a chance
because nothing in this life is without risk,” he said.

The Senate chief noted the numerous apprehensions raised over the hazards posed by
operating a nuclear power plant in the country.

But the government must do what needs to be done to immediately address the power
supply problem, he stressed.

“Nothing will happen if it is all talk, we need to do the right thing to give a solution to
the power problem,” Enrile pointed out.

As an initial solution to cut the supply gap in Mindanao, Enrile agreed with Sen.r Serge
Osmeña III’s suggestion to deploy power barges to augment the remaining generating
plants that are operating while concerned agencies move to repair and rehabilitate
existing power plants on the island.

Enrile also brushed aside proposals from some lawmakers to grant President Aquino
emergency powers to deal with the situation.

“That is outrageous (emergency power proposals). The President holds many powers as
Chief Executive,” Enrile said.

“He can borrow money (to repair or build new plants), or negotiate contracts that are
needed to address the problem,” he said.

Angie M. Rosales

Power crisis, a dj vu

EDITORIAL DT-04/15/2012

What is keeping the administration of Noynoy from revisiting the Electric


Click to
Power Industry Reform Act (Epira), a law that had failed to live up to its
enlarge
promise of providing cheap electricity, is totally baffling.
But clues were brought to light on his administrations true motives during the Mindanao
Power Summit where he resorted to blackmail to get his, and his cronies way with the
power contracts.

Noynoy said that electricity users in Mindanao will have to live with high power bills
since the region cannot rely anymore on cheap hydroelectric power plants as their main
source of electricity, citing climate change and the speed of economic progress on the
island that cannot be sustained by hydroelectric sources.

What is being introduced are power barges as stop gap solutions and blockbuster
contracts running into billions of pesos. And they are in the offing as a long-term
solution to the problem.

During the Epira era, electricity rates in the country moved from the second highest in
the world to the most expensive compared to anywhere else in the globe.

The fact alone that Filipinos have the ill fate of paying for the most expensive electricity
rates globally should have given Noynoy a hint on the epic failure that is the Epira law.

The Epira became law in 2001 and its main objective was to end shortages in power
supply and at the same time pull down the cost of electricity which was, at the time of
the implementation of Epira, the second highest in the world, next to Japan.

Noynoy and Energy Chief Rene Almendras, however, even went to the defense of the
law, saying that its improper implementation and not what it provided for was the
reason for the disastrous power situation in Mindanao.

Almendras even tossed the blame, for Petes sake, on the Arroyo administration for
supposedly keeping electricity rates in Mindanao artificially low. The shortage in power
supply, however, all happened during Noynoys watch and never during Glorias, when
even Mindanao was enjoying surplus of low-cost electricity.

Low cost implies to Noynoy corrupt practices being behind it and the low Mindanao
electricity rates should catch up with the expensive rates in Luzon.

The high cost of electricity, however, was the result of onerous contracts signed during
the term of former President Fidel Ramos, who took advantage of the emergency
powers he obtained from Congress to sign endless multimillion-peso power plant
contracts after the economy was crippled by daily brownouts that lasted up to 10 hours
a day due to the inefficiencies under the administration of Noynoys mother, former
President Cory Aquino.

The oversupply from power plants resulted in the piling up of obligations on unused
electricity now called stranded costs mainly due to the take or pay provisions of the
power contracts signed by Ramos.

Until now, despite various reviews called by the previous government on the contracts,
these deals which have effectively doubled the amount paid for by consumers from
generation charges which are the actual cost of electricity used continue to be saddling
the Filipinos.
Since the cost of electricity in Luzon is effectively padded, there would be no reason for
electricity rates in Mindanao to catch up with those of Luzon.

The name of the Aboitiz family which is into power generation and whose members are
solidly part of the yellow army and who were the first to strike it rich by turning the
power crisis during Cory into an opportunity with the sale of generator sets, is again
cropping amid the crisis in Mindanao.

The question should be asked why a power crisis always happens during an Aquino
term?

Sweetheart deals again and all under the guise of a straight path that has gone
crooked?

Fishy deals in the ‘daang matuwid’

EDITORIAL DT-04/18/2012

Fossil fuel is the most expensive fuel in the world today, while privatization
Click to
in this country has proven not to be beneficial to the Filipinos, as higher
enlarge
prices and the same sloppy and bum service follow after a government sells
the country’s assets.

And yet there went Noynoy, announcing to one and all that he plans to sell all
government power plants in the country, including hydroelectric plants as this is one
way to attract investors.

In the time of Noynoy’s mother, her solution to the eight-hour daily blackouts problem
which she and her administrators created in the first place, was to come up with
overpriced contracts for fuel barges, which initially solved the problem, but ended with
the consumers paying more for the cost of power.

Naturally, Cory’s cronies made a pile of money with such contracts that were exempt
from bidding and outside of the Commission on Audit sphere.

While the Fidel Ramos government promised cheaper power with his many independent
power producers (IPPs) contracts with sovereign guarantees, along with his
privatization scheme, such a promise was found to be a ruse for his administration to
make money because definitely, power prices zoomed, and consumers were even made
to pay for unused or undelivered fuel or power, as stated in the overpriced contracts.

Comes now Noynoy, who not only blames the previous governments for the power
failure in Mindanao, claiming that the Mindanao power plants were not attended to for
over 30 odd years. But he refuses to admit that he and his Energy secretary did nothing
to repair these plants in the close to two years of power and position, and takes the
same “solution” his mother took, but is adding to it the Fidel Ramos formula — and in a
really big way, with announced plans to sell off and privatize all government power
plants — including the hydroelectric plants, which are highly prized by investors due to
the cheap cost to operate these power plants.
Naturally, it will be Noynoy’s cronies and business associates who will be bagging the
contracts which will not only be overpriced, but will also definitely be marked by under
the table deals.

And Noynoy has the gumption of speak about his claimed straight path? It’s all a false
image that Noynoy and his administration try to project. Unfortunately, many Filipinos
are hoodwinked by talk of his straight path even when it is clearly crooked.

What cannot be understood, not only by the Mindanoans but the majority of Filipinos
spread nationwide, is why Noynoy insists on privatizing these power plants when the
government certainly can, and should, spend on the rehabilitation of these aging power
plants.

His government has kept on borrowing for stupid reasons, just as he and his Budget
secretary stupidly refused to spend the allocated budget funds and brought the
economy down in the proces. But there’s a lot of revenues that his administration
collects from his exaggerated expanded value added tax (eVAT) on virtually every item
that one has to purchase.

Why can’t funds be allocated by this administration for the rehabilitation of these aging
plants? For that matter, if this government has to borrow funds, why can’t government
engage in the building up of power plants instead of giving his cronies fat government
contracts?

But Noynoy insists that the country needs investors to put up these power plants, which
sounds truly fishy. Why rely on investors, when cost-wise, these hydroelectric plants are
cheapest to operate?

Then too, once private business gets into the picture, high prices are certain to follow,
and for sure, Noynoy knows this, as this was his blackmailing message to Mindanaoans
who are against privatizing their hydroelectric plants.

Noynoy and his administration never think of the people. Only themselves. In the end,
the people will be going against him.

I am the boss, not you, Filipino people

NO DT-04/22/2012
NONSENSE
It is indeed ironic that during his oath-taking at the Luneta as President of
the Republic, President BS Aquino said “You are my boss,” but at the Power
Jacinto
Summit in Davao he told his audience, “you pay more or else there will be
‘Jing’ Paras
more blackouts in Mindanao.” This means that Mr. BS Aquino is after all not
the servant of the people which he initially wanted to portray, but he is the
boss and dictator as he dictates on the people of Mindanao what to do, instead of doing
what the people had requested him to do which is to solve the power crisis that has
gripped Mindanao.

The Power Summit which was held in Davao recently which was supposed to find
solution to the power crisis in Mindanao, turned out a to be a big disappointment to the
disgust of the attendees and stakeholders who expected a solution to the recurring
blackouts lasting eight to 10 hours daily in Mindanao.
No less that the President was there to preside and this has provided hope to the
people because the highest official was attending the summit and would provide an
answer to the nagging question of how to solve the lack of electricity in their area.

Instead, they heard the opposite, with BS Aquino telling them that the power rates in
Mindanao will go up. This shocked the audience since an increase in electricity rates at
this time will only bring burden and hardships to the people considering the increase of
the price of oil which has also resulted also in the increase of prices to basic necessities
as well as transportation costs. And yet, despite all these, they heard the President in
the most contemptible manner telling his audience with a straight face and without
emotion, “pay more or else live with more blackouts.”

Rep. Teodoro Casiño in reaction to the President’s statement said, This was pure
blackmail, stressing that the so-called lack of power or electricity was just a diversion,
meaning that the power and energy elites are actually capable of providing power
generation to Mindanao but are making it appear that they cannot, so their power
barges and facilities which are mothballed may be used to make a wind-fall profit at the
expense of the people of Mindanao and also to force the government to privatize Agus
and Pulanggi hydro-electric power plants.

In fact the summit has revealed that two power barge which the government used to
own were already sold to a company purportedly owned by the Aboitiz family. And four
power barges are about to be disposed by the Department of Energy (DoE). This
certainly looked questionable as the two barges were sold upon the approval of DoE
despite its knowledge that lack of power supply in Mindanao already existed and the
power barges could have been useful to government to address the problem of lack of
electricity.

In sum, the summit showed that this government is not capable of offering any
realizable solution to solve the power crisis in Mindanao. Although they have offered to
repair the hydro-electic plant, this will come about only after two years. This is not a
solution contemplated by the people as their need for electricity is urgent. The
deployment of power barges is not the solution as the consumers cannot afford an
increase of at least 50 centavos per kilowatt. This is a great burden to the middle and
lower income bracket. The electric cooperatives are also reluctant to buy from the
power barges because it means bankruptcy for them. What the people expected from
BS Aquino if indeed he is bent on ramming through his kind of solution which are the
power barges, the people expect him to provide subsidy to help the consumers cope
with the increase in rates. Similar to the Pangtawid Pasada where the drivers of
pedicabs and jeepneys were subsidized, the electric consumers as well as the electric
coops be aided too. If government can afford billions of doleouts under the 4ps
program of DSWD, why not divert some of these funds to subsidize the increase in
rates of electricity under a system run by power barges while additional power plants
are being built in Mindanao. However, this kind of solution was never offered by
Almendras or BS Aquino. They want instead to let the people swallow the solution of
providing electricity through the power barges at very exorbitant rates which certainly
the consumers cannot afford.
This is because the DoE has already contracted the private business elites who my
source said were election contributors, wih some the former bosses of the DoE
Secretary.

Furthermore, another problem that must be solved is the question of whether


Almendras is really competent and capable of being at the helm of the DoE. All these
problems were already known to this new administration long before as these issues
were election campaign issues and BS Aquino promised the electorate reforms not only
against graft and corruption but also on the economy which surely includes the power
generation. However two long years have gone, and the DoE with Almendras on top
were merely fence-setting. In fact Mr Almendras, during the summit had admitted on
the DoE’s failure to address the power shortage in Mindanao. He said, “ I assume
responsibility, We failed, it was my failure not the President. My failure was, I was not
able to execute the plans at the appropriate time.

Indeed from the statement of Almendras, he is admitting that he cannot do it, hence
we can deduce that if it was another person appointed as DoE Secretary other than
Almendras, who might have been capable and competent and with perseverance, the
people of Mindanao would by now not be experiencing the hardships of daily brown-
outs affecting industry and people. But since this is not so and the work has yet to be
done, the question is, is it logical to continue having Almendras to head the DoE and be
entrusted to do the task of solving the power crisis in Mindanao?

Thunderbolts of greed

DIE DT-04/23/2012
HARD
The Filipino people as a whole have finally awakened to the electrocution they
III
have been victim to by the Electric Power Industry Reform Act (Epira) passed
and signed into law 10 years ago. It took the resistance of our brothers in
Herman
Mindanao for the rest of the country to realize that a fight does exist between
Tiu
the commonweal and the interest of the oligarchy. For so long, the oligarchs
Laurel
have encroached on and taken over government to execute their extractions of
profit and wealth at the expense of the people.

Luzon and the Visayas were first to be hit by the thunderbolts of greed. And perhaps
because the shock and confusion at that time was still too novel, both succumbed to
defeat. Mindanao, on the other hand, which enjoyed a decade-long exemption from the
Epira, had ample time to witness the disastrous economic impact of that law and its
deleterious effect on the lives of their brothers northward. And so it was when the
oligarchs’ final phase of privatization kicked in, Mindanao was already poised to fight
back.

Among the many pivotal personalities who need to be commended in this crusade is Mr.
Luis “Louie” Corral, who has been key to preparing the studies that many of Mindanao’s
political leaders are using to inform themselves and the public, as well as to prepare for
their debates with the Department of Energy (DoE) on the power crisis and the Agus-
Pulangi hydroelectric complex. These points — which would have been incontrovertible
even by Epira’s standards and those of high power price champion, Sen. Serge Osmeña
— were all set to be presented to PeNoy at the Davao power summit two Fridays ago
but were set aside because the chief executive opted to harangue the summit’s 1,000
attendees with an irked lecture.

Perhaps because a few sensible people admonished him some time after that, BS
Aquino III surprisingly had a change in tone. Last April 21, for instance, it was reported
that he gave an order to “Review power rates,” noting that the “…Hike in electricity
charges in Visayas,” in regard to the latest Energy Regulatory Commission (ERC)
approvals of rate hike petitions, “may be unwarranted.”

This announcement, of course, is a heretofore unheard of expression of interest,


concern, and sympathy for the plight of power consumers from PeNoy, which we anti-
Epira crusaders can only hope is a sign that a spark of realization of the very real and
massive problem of power rates in this country has been triggered. We hope, too, that
this is a sign that the power of the oligarchs’ agents, such as Serge Osmeña and Dina
Abad, is already on the wane. Maybe it is also PeNoy’s realization of the political impact
of his failure at the Davao summit, which could seriously damage his 2013 senatorial
slate. Whatever it is, we hope BS Aquino III has now finally wised up because the
nation will need his support to weather the worst of the electric storms to come.

Louie Corral has an excellent Power Point summation of the thunderbolts that will be
hitting us if nothing is done to avert the damage that Epira has caused the 92 million
Filipino consuming public. In the section, “The Coming Storm,” we are alerted to:
“Additional rate increases from Psalm (Power Sector Assets and Liabilities Management
Corp.)’s P1 trillion stranded costs… as part of the ‘Universal Charge’… (will) cost an
additional P0.39 per kilowatt-hour (kWh); (the National Power Corp. or Napocor’s Small
Power Utility Group’s) budget shortfall of P7 billion just for 2011… (will cost an)
additional P0.07/kWh… (also for) the ‘Universal Charge;’ an additional SPUG budget
shortfall of P3.1 billion (going to) the ERC’s Incremental Currency Exchange Rate
Adjustment (Icera) and Generation Rate Adjustment Mechanism (Gram)… will increase
power rates for off-grid areas; the Napocor-Manila Electric Co. P14-billion Court of
Appeals settlement may prompt Meralco to pass-through the amount of penalty to its
consumers.

“Pending ERC petitions of Meralco, Davao Light and Power, Visayas Electric Co., and
other distribution utilities (including 119 electric cooperatives); transition supply
contracts between distribution corporations and/or Napocor and the privatized
generating firms end(ing) in 2011 (that) are up for renewal… (noting that since) these
generating companies are defined under the Epira as not being utilities, and therefore
not subject to a 12-percent ceiling on (their rates of return)… the end result is that…
generation charges will zoom up with their new contracts; transition supply contracts of
independent power producers (IPP)… selling through an IPP Administrator (salesman or
middleman) end(ing) in 2011… will bring up generation charges (with new IPP
contracts); the proposed Renewable Energy program with its feed-in tariff would tie the
country up to immature, unreliable and expensive power that would entail an additional
P0.1256/kWh; the Supreme Court case on the illegal dismissal of Napocor workers that
will net back wages of up to P48 billion…”

Louie adds: “Every one centavo per kWh increase represents P657,000,000 per annum
(based on current demand of 7,300 megawatts); one centavo/kWh of power increase
means 40 percent or P263,000,000 taken away, which should be food for the poor
(based on lifeline rates); (while) 10 percent (of it) or P118,000 represents educational
costs, medicine, transportation or house rentals.”

There are many, many more alerts issued by Louie that we will have to include in our
next columns. But there is an important one that we must highlight right now: The
much-vaunted full “open access,” which the DoE and ERC keep claiming will bring down
rates, but which may instead cause rates to rise as large scale commercial/industrial
consumers like giant malls and the like set up their own power plants, causing Meralco
and its ilk to compensate for lost revenues by filing petitions for more rate hikes. At this
point, only fools won’t see that these are the unintended consequences of an ill-
thought-out, greed-motivated, corruption-tainted privatization law.

(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., for constant updates on “The power thunderbolts to
hit;” visit http://newkatipunero.blogspot.com for our articles plus TV and radio archives)

Noy retreats on plan to sell hydro plants

By Rocky G. Nazareno

DT-04/26/2012

President Aquino did a 180-degree turn yesterday on the sale of hydroelectric plants in
Mindanao as he is now supposedly considering a proposal by Mindanao Development
Authority (MDA) chairman Lualhati Antonino not to privatize two hydro plants that
supply cheap electricity in the region and, instead, allow Mindanao groups to operate
and manage the facilities.

According to presidential spokesperson Edwin Lacierda, Antonino had already conveyed


the desire of the Mindanao people to take over the Agus and Pulangi hydro-power
plants which provide 52 percent of the electric demands of Mindanao.

Right after the Power Industry Summit held in Mindanao, Aquino said the goal of his
administration is to sell off all the remaining power plants in the country, including
hydroelectric plants, the sale of which were waived under the Electric Power Industry
Reform Act (Epira) but are highly-prized by investors due to the cheap cost to operate
these.

The Cebu-based Aboitiz Power Corp. of the Aboitizes, whose family

members are said to be close business associates of Aquino, is currently engaged in a


massive build-up of hydroelectric power plants in Mindanao and had expressed interest
in purchasing the two power plants when these are privatized.

Aquino said the government is considering the possible privatization of the existing
power plants in the country to address the energy situation in Mindanao as he
encouraged more private investments in the energy sector to provide electricity for the
people at a lesser cost.
“Secretary Antonino was informed by the President to come up with a study, come up
with a proposal because he wants to take a look,” said Lacierda yesterday during a
press briefing.

He added the President told him that: “The important thing is, at the end of the day, I
want to have the people of Mindanao having no brownouts and reasonable electricity
rates.”

Lacierda also clarified earlier reports coming from Antonino that the President is now
opposed to the privatization of these power plans.

“There was nothing like that, nothing categorical that the President is opposed to
privatization,” he said.

Antonino had earlier said that Mr. Aquino has already changed his mind in pressing for
the privatization of National Power Corporation (Napocor) plants in Mindanao.

According to her, the Chief Executive had realized that privatizing the plants will violate
the Epira (Energy and Power Industry Reform Act) which prohibits a private company
from owning 30 percent of the power generation sector in a certain area.

She further explained that the Agus and Pulangi plants share the same source and
water rights and, thus, cannot be sold separately. As such, the eventual buyer of the
plants would violate the Epira because it will corner more than 30 percent of power
generation in Mindanao.

But Lacierda denied that Antonino had made such a claim.

“That is not an exact quote. I spoke to Secretary Antonino,” he said.

But he did confirm that Antonino had proposed that “the people of Mindanao,
themselves, want to handle the management of those plants.”

“So the President said, let’s take a look, to come with your proposals and we’ll see,”
Lacierda said.

“When I visited Mindanao, the people there were asking if the government plans to
privatize Agos and Polanggi (two major hydroelectric plants) and I believe that is the
direction where we are going,” Aquino said previously.

He cited the advantages of privatizing the power plants which, he said, include the
increase of capacity to supply the requirements of the consumers.

He also stressed that the government is not only eyeing to maintain the existing energy
facilities but also to maximize its potential to provide sufficient supply of power and
meet the requirements of the developing economy in Mindanao.

Aquino also vowed yesterday to address the country’s growing energy needs but
stressed the need to come up with the best solution after extensive consultations with
different stakeholders.
During the book launch of the People Power Volunteers for Reform (PPVR), one
volunteer appealed to the President not to allow the putting up of a coal-powered plant
in Subic Bay in Zambales because of its effects on the environment.

The President said an all-inclusive consultation with stakeholders will be done before
the government decides on the best solution to the country’s power problems and the
best means to produce more energy.

There has been strong opposition against coal-powered plants as well as gas plants in
the country. Newer and cleaner means of energy production on the other hand, are
costly, according to the President, citing solar energy and ocean tidal wave. Lack of
water due to changing weather patterns is also becoming a concern in operating hydro-
powered plants, he said.

“I won’t comment specifically on the Subic coal plant but at the end of the day, we
really have a growing population. We have a growing base. Manufacturers are returning
—everybody needs electricity and we have to produce it somehow. We will always do it
in consultation with the people,” the President said.

The President explained that Subic is not just a tourist site but it’s also a locator site for
manufacturing companies.

He pointed out that setting up a power plant whether in Pampanga, Tarlac or Bataan
should be done after knowing the pulse of the people.

“We will try to come up with a best solution. But at the end of the day, we are forced to
come up with a solution,” he said.