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Consolidating Consensus, Advancing People’s Struggles and Building Alternatives
ABOITIZ, PRIVATE CORPORATIONS
BIGGEST GAINERS UNDER EMERGENCY POWER
The current power supply crisis played up by Malacanang makes us recall the events which surrounded the Mindanao Power Summit of April 2012. President Aquino then drummed up the issue of an impending power supply shortage in the island as he called for the privatization of the Agus and Pulangi hydropower plants. Meanwhile, his Energy Secretary Rene Almendras was priming up Aboitiz Power to get ready not only for a private takeover of the two power plants but to make available its power barges in Mindanao to fill in the immediate shortage.
More frantically warning this time of a power supply crisis in summer next year, 2015, Aquino with the prodding of his Energy Secretary Jericho Petilla, is asking Congress to grant him emergency powers under Section 71 of the Electric Power Industry Reform Act (EPIRA). What is the President going to do with that power? Petilla says that the country has to settle with short-term measures like contracting power from private power producers because new power plants cannot be set up overnight and that the government is not allowed under EPIRA to set up one. He also added that the privatization of Agus and Pulangi hydropower plants can no longer be postponed.
Visible then as now, Aboitiz Power sings the same song as Aquino and Petilla do. As refrain, it talks about its capacity to build hydropower plants like Tudaya 1 and projects in Sta. Cruz, Davao del Sur with a power capacity of 13.6 MW through its subsidiary, Hedcor – proffering itself as the buyer of Agus and Pulangi plants. More importantly, Aboitiz pushes for a “more balanced “ sourcing of energy – in the direction of more coal plants like its Therma South’s 300 MW coal-fired power plant in Davao City and Sta. Cruz, Davao del Sur. All over the globe, opposition to more coal plants as huge emitter of carbon continues to mount. In addition, Aboitiz advertises its power barges for short-term power supply.
Still an EPIRA problem
The emergency power of the President when enacted will of course be within the privatization regime under EPIRA. Aquino can only run to private monopolies like those of Aboitiz, Lopez, San Miguel, etc and a number of multinationals forging co-ownerships or partnerships to get more power. More likely, given this administration’s predilection for band-aid solutions, the option will be in the form of contract with power barges for the duration of the summer months.
Freedom from Debt Coalition then asks: What happened to all those multi-stakeholders conferences and consultations convened by the Department of Energy on the power crisis where the need to review and amend EPIRA, at the least, or repeal it as FDC and others call for to provide long- and medium-term solutions. In those conferences, one thing is most prominent – the Government through EPIRA abdicates to the private sector its role in planning, implementing and financing a total energy plan for the country, and allows its regulatory powers to be captured by the private monopolies. We are the complete mercy of private corporations to deal with a public good like electricity.
There is no long-term solution to the perennial power supply crisis and the unending rise in power costs other than for Government to repeal EPIRA, junk the privatization regime, and put under public control the power industry. A decisive component of this is to restore to Government its planning and regulatory powers apart from restructuring ownership of power generation, transmission and distribution in favor of the State and the public.
For the short-term, FDC demands that Malacañang, the Department of Energy (DoE) and the Energy Regulatory Commission (ERC) release first a comprehensive report on the unused and reserved capacity of all the power plants in the country and demand the power generating companies to use them. The worst electricity price crisis of 2013 is caused by the collusion between the power private monopolies which game the market – the structurally flawed WESM. Part of gaming is withholding supply or under-registering capacity – another word for hoarding to get the highest price in the market.
Concurrently, FDC asks the House of Representatives (HoR) and the Senate to withhold decision on DoE’s request for emergency powers until after the ERC releases its decision on the supply manipulation of power producers during the Malapamaya shutdown. The reputation of power producers to collude and under-report its supply capacity, under the nose of a negligent DoE, renders any claim of supply shortage from both parties questionable.
As a short-term measure, we ask the HoR to include in 2015 General Appropriations Act (GAA) the following alternative budget proposals from FDC, Philippine Movement for Climate Justice (PMCJ), and Social Watch Philippines:
• Provide finance mechanism of P12.8 billion for 40 MW solar rooftop installation to kickstart net-metering in Metro Manila and Cebu (20 MW each) and help address the supposed energy deficiency in Luzon and Visayas, if it is in fact true;
• Instead of privatization, financing for the rehabilitation of the Agus and Pulangui Hydropower Complex. The hydropower complex, which has a dependable capacity of 450 MW and an additional 300 MW during good water months, provides approximately 40% of the baseload needs of Mindanao. Rehabilitating the complex will provide an additional 350 MW dependable capacity. After rehabilitation, the Agus Pulangui can provide for almost half of the 1523 MW electricity demand in Mindanao by 2016.
• Reinstatement of the allocation for subsidies of Electric Cooperatives for Renewable Energy Projects amounting to P15.8 billion. In the current proposed budget, subsidy for electric cooperatives (ECs) decreased from P 15.8 billion last year to P 2 billion this year.
• Inclusion of P 1 billion budget for DoE for subsidizing incentives for the installation of 5kW solar PV systems for 25,000 households which have no access to electricity
• Financing subsidies amounting to P7.7 billion for installation of solar PVs in public schools and SUCs, rural health clinics, and barangay halls; P3 billion for 10,000 pilot public schools and SUCs; P1.5 billion for 5,000 rural health clinics; and P 3.2 billion for pilot barangay halls.
• Increase Appropriation for SPUG Capital Outlay. P 1.179 billion budget for the SPUG capital outlay is not enough to address the lack of electricity access of households in remote and isolated villages in the country. Most of these villages are situated in geographically isolated and disadvantaged areas (GIDA).