HERMAN TIU LAUREL: ABETTING POWER
BLACKMAIL
MANILA, MARCH 27, 2012 (TRIBUNE) DIE HARD III Herman Tiu Laurel
(photo) - 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 Osmea, 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 Malacanang and
the Yellow media as cleaner than clean.
Chief News Editor: Sol Jose Vanzi
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