| DIE HARD III |
 |
| Herman Tiu Laurel |
03/26/2012
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 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 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)
(Reprinted with permission from Mr. Herman Tiu-Laurel)
Source: The Daily Tribune
URL:
http://www.tribuneonline.org/commentary/20120326com5.html
