11 October 2012
The Freedom from Debt Coalition (FDC)-Visayas is urging the National Government to stop its intention to sell the Independent Power Producer Administration (IPPA) Supply Contract of the Unified Leyte Geothermal Power Plant (ULGPP). FDC-Visayas believes that this will result to rising electricity rates in the Visayas primarily in Eastern and Central Visayas. The islands of Negros and Panay; and even some parts of the Bicol Region in Luzon will also be affected.
Last October 4, 2012, the state-run Power Sector Assets and Liabilities Management Corporation (PSALM) has bidded out the IPPA covering the 640-megawatt Unified Leyte Geothermal Power Plant. PSALM has divided the capacity of the ULGPP into 384MW (60%) and 255MW (40%) as 2 separate bids, the 40% is now being offered to various Electric Cooperatives, while the larger chunk will be offered to the “big boys” of the power industry.
FDC fears that the corporate privatization of the IPPA supply contract will only result to an additional burden for the consumers because corporate entities will run the utility as profit-generating endeavors rather than as a service being provided to the public. We should not forget the experience of the people of Negros Occidental when Green Core Geothermal Inc. (GCGI), the power arm of geothermal leader Energy Development Corporation (EDC), entered into a power sale agreement with Central Negros Electric Cooperative (CENECO) in December 2011. After the said agreement, instead of providing clean, reliable and affordable electricity, several Negrenses were subjected to a 100% increase in electricity rates. FDC-Visayas is concerned that the sale of the ULGPP-IPPA contract will only bear the same results.
If the government is bent on selling the IPPA contract of the ULGPP, we are pushing for a preferential treatment for Electric Cooperatives as contractors of the IPPA. FDC believes that Electric Cooperatives will serve as a democratizing platform in the power industry because of their design as democratic organizations with “limited interest in capital.” The operational framework of the cooperatives veer towards providing service to its membership rather than extracting profit from them. This runs contrary to how Big Corporations behave when the issue of profit is involved.
FDC also believes that the steam capacity of the ULGPP should be under state control as it is part of the “national wealth” of the country. Such state-control should ensure that the public’s interest and needs be upheld thus the necessity for rate regulation in favor of the greater number of poor consumers.
Amidst these calls, the need to repeal the Electric Power Industry Reform Act of 2001 (EPIRA) is only magnified. It is clear that after 11 years, the EPIRA has not done anything to address the power rates, to provide reliable and secure power supply and to lay the ground for fair competition. Instead it has only allowed the encroachment of Big Corporations into a public service that our government should ensure the delivery of.
Stop the Sale of Unified Leyte-IPPA Supply Contract!
No to Corporate takeover of our National Wealth!
EPIRA is a Failure!