Ed Cabalio

‘Why is there sudden power lack in South?’

‘Why is there sudden power lack in South?’
By Lina Sagaral-Reyes, Amy R. Remo, Gil C. Cabacungan Jr.
Inquirer Mindanao, Philippine Daily Inquirer

MANILA, Philippines—Reeling from the power shortage in Mindanao, rural electric cooperatives suspect that “some sectors might be manipulating events to cause an artificial crisis” on the island.

“Why this sudden power supply shortage in the last two months?” asked Sergio Dago-oc, president of the Association of Mindanao Rural Electric Cooperatives (Amreco). Amreco’s 33 members serve 1.8 million customers in rural areas on the island.

Dago-oc said his group was asking the National Bureau of Investigation to look into the operations of the state-owned National Power Corp. (Napocor) and the National Grid Corp. of the Philippines (NGCP) on suspicion that the power rationing in Mindanao was being stage-managed.

Dago-oc, the general manager of the Misamis Oriental Electric Cooperatives, said the cooperatives were informed as early as October last year that the power supply shortage would peak and be felt only in 2014.

The cooperatives have started asking “why is there a massive drumming up of the power crisis?” he said.

“All these simultaneous stories, press releases? They all got into the media as if someone is masterminding all of these.”

Energy Secretary Angelo Reyes is urging President Gloria Macapagal-Arroyo to declare a power crisis in Mindanao so the government can use emergency powers to address the island’s severe supply shortage.

Reyes said the emergency powers would allow the government to invoke Section 71 of the Electric Power Industry Reform Act (EPIRA) and enable Napocor to buy or lease modular generation sets to augment the power supply in Mindanao.

Malicious or ignorant

NGCP president Walter W. Brown Monday said those making claims that the power rationing, particularly in Mindanao, was being manipulated were “either malicious or ignorant.”

Brown said the accusations were completely without valid basis. “They are misinformed. They should make their research before they make claims like that,” he said.

The power supply shortage has resulted in brownouts in Mindanao. Parts of Davao Oriental, for instance, had no power supply for 24 hours during the weekend.

A prolonged dry spell caused by El Niño has reduced the generating capacity of the island’s hydroelectric plants by 80 percent, according to the government.

Bite the bullet

Dago-oc said the cooperatives had expressed fears that some sectors were trying to profit from this situation.

“We are in doubt if some sectors are trying to profit from this situation so that we will be forced to bite the bullet,” he said.

Asked what he meant by biting the bullet, Dago-oc said NGCP might be forced to buy from independent power producers (IPPs) that sell electricity at a much higher rate.

There are several IPPs in Mindanao and more are planning to come over.

Aboitiz Power Corp. plans to put up a coal-fired 300-megawatt (MW) plant. Other projects in the pipeline include the 300-MW Pulangi Dam 5 and hydropower plant in Kibawe, Bukidnon, projected to be finished in 2014. Another project is the coal-fired 200-MW power plant in Sarangani.

Dago-oc said the IPPs were charging more for the power they were producing.

“We get electricity at P2.48 per kilowatt hour from the NGCP generation mix. But the IPPs will charge us P7.90 per kilowatt hour. Some people might be manipulating the situation to create artificial shortage,” he said.

At Amreco’s meeting in Manila last week, the members agreed to pass a manifesto urging Ms Arroyo to act swiftly on the power crisis and to ensure that it would not affect the conduct of elections in May.

IPPs slam proposal

The Philippine Independent Power Producers Association (PIPPA) slammed the proposal to grant Ms Arroyo emergency powers.

PIPPA president Ernesto Pantangco described as impractical the idea of invoking Section 71 of the EPIRA for Napocor to be able to buy modular diesel generating sets with about 1- or 2-MW capacity.

“Even if you had emergency powers, the diesel gensets would only (generate) about 1 to 2 MW each. If we have a shortage of say 400 MW, divided by 2 MW per genset, that means you have to close some 200 contracts. Can you do that between now and May 9 in time for the elections?” Pantangco said.

He said the government should have explored the demand-side management or energy conservation efforts.

He suggested that the energy department look at the available capacity from industrial users and commercial centers that can be freed up should the interruption-load supply program be implemented.

Under the program, industrial users and commercial centers can make use of their diesel-generating sets during peak hours and stop withdrawing power from the main grids, thus resulting in significant drop in power demand.

After peak hours, these users can go back to drawing power from the grid. “This has not been factored in the supply scenario,” he said.

Cavite Rep. Crispin Remulla said he was not surprised that the IPPs opposed the government’s purchase of gensets to augment supply because it would unduly affect their “captive market.”

Committee backs powers

In the House of Representatives, the committee on energy Monday endorsed the proposal for the President to invoke Section 71 of the EPIRA.

Cagayan de Oro Rep. Rufus Rodriguez made a motion for the committee to recommend that Ms Arroyo invoke the EPIRA section.

“The government should do something fast because the situation is getting worse,” he said.

Rodriguez said House leaders should immediately act on his motion, which was unanimously approved by members of the committee at the hearing, to ensure that a special session be held on either March 8 or 9.

At the hearing, Reyes said it would take one to three months for Napocor to lease and install diesel-fed modular power generation sets with varying capacity depending on the demand in the area.

P14 per kilowatt

Reyes estimated that the government would spend P5.5 billion to provide 160 MW in extra power to Mindanao. This additional power will be sold at P14 per kilowatt per hour from the region’s current rate of P2.83 per kWh.

The generation sets would likely to be acquired at negotiated contracts to facilitate their deployment.

Fearing that business and communications in Mindanao might end up being crippled due to the power crisis, Senate Majority Leader Juan Miguel Zubiri urged the President to call for a special session so that Congress could grant her emergency powers.

At the Kapihan sa Manila Hotel, former Senate President Franklin Drilon, a Liberal Party senatorial candidate, warned that giving Malacañang emergency powers was not wise given the corruption scandals that rocked the administration.

Sen. Mar Roxas, LP vice-presidential candidate, said at the forum that giving Ms Arroyo emergency powers would not make the rains come.

He said the power crisis in Mindanao, which is dependent on hydroelectric power, was caused by the lack of rain.

“The long years of neglect, inefficiency and wrong prioritization cannot be corrected by the magic wand of emergency powers,” Gabriela party-list Rep. Luz Ilagan told the Inquirer by phone.

But at a forum in Davao City, Virgilio Leyretana, director of the Mindanao Economic Development Council, said granting the President emergency powers was something that must be supported.

Not ultimate solution

Ed Cabalio, an NGCP regional corporate executive, said emergency powers were not the ultimate solution to the Mindanao power crisis.

“Mindanao is a peculiar grid. We have the resources like hydro but no one is really investing in it because of lower rates,” he said at the forum. With reports from Jeffrey M. Tupas, Inquirer Mindanao; Philip C. Tubeza and Christine O. Avendaño