DOE says govt not in collusion with private sector to raise electricity prices in Mindanao

March 23, 2012 9:28 am 

MANILA, March 22 — The Department of Energy on Thursday said the government is not in collusion with anyone to push up power prices in Mindanao by creating an alleged artificial power shortage.

"The DOE has to follow existing laws which is very clear about government’s role. We are doing all we can within the limits of law. Our actions have been as transparent as possible with very active consultation with stakeholders. We are not siding with anyone but just highlighting the truth of the situation. One such truth is that our actions have resulted in revenue reduction for some corporations clearly proving that we are not favoring big business," Energy Secretary Jose Rene Almendras said.

Mindanao continues to suffer 4 to 8 hour power brownouts due to generation deficiency.

Almendras said the power shortage is "very real" and not artificial like other sectors say.

"We have issued a Department Circular to rationalize the power supply in Mindanao but, again, this will only be a band aid solution. The real solution for Mindanao, as we said in 2010, is additional base load generation capacity which will require investments from the private sector as allowed by law. These investments will only happen if the local governments and the people of Mindanao help in solving the situation," Almendra said.

Meanwhile, Senator Serge Osmeña, chairman of the Senate Committee on Energy, expressed his strong support for Almendras in his efforts to try to resolve the electric power shortage in Mindanao.

"Secretary Almendras has been trying to manage an unmanageable situation," declared Sen. Osmeña, who also co-chairs the Joint Congressional Power Commission which is tasked with oversight responsibilities on the implementation of the Electric Power Industry Reform Act (EPIRA) of 2001.

"The national reform policy on electricity, which was approved by Congress in 2001, was to harness the finances and management talents of the private sector in ensuring that the country would be supplied in a timely manner with dependable, quality and reasonably priced power," Osmeña explained.

"The NAPOCOR was bankrupt. Its assets, if sold, could not cover its liabilities," Osmeña added. "And there was no way it could depend on Congress to support NPC thru annual appropriations in the National Budget given the needs of other line agencies like the Departments of Education, Health, Public Works, Defense, Police, etc."

"Inopportunely, the residents of Mindanao, through their representatives, pushed for a 10 year exemption from the privatization program of the NPC-owned plants in Mindanao, notably the Agus-Pulangui hydropower complex which at that time supplied about 75% of the power needs of Mindanao at the lowest rate," Osmeña said.

"Even worse, the bicam committee agreed to postpone the construction of the transmission line interconnection between Leyte and Surigao," he also said.

"But the energy demand studies made by the Department of Energy showed that Mindanao would run short of power in about 10 years. So with much misgiving, I supported (as a member of the Bicameral Committee on the EPIRA) the wishes of my brother congressmen from Mindanao but since 2010, or 2 years ago, I have been regretting in having acceded to their well-meaning requests because I may also be blamed indirectly for the power shortage that is causing economic and social hardships to the residents of Mindanao," Osmeña said

Unlike the rest of the country which has already transitioned to the new market oriented regime, Mindanao remains isolated from the national transmission grid which prevents excess power in the Visayas from being fed into Mindanao.

"The Luzon and Visayas areas now enjoy a sufficient supply of electricity. Visayas alone has a surplus of 380 megawatts, which could easily cover the current shortage in Mindanao," he added. Luzon and Visayas are about to operationalize the "open access" program which will translate to even lower prices for electricity.

"Secretary Almendras has been adhering to the policy laid down in EPIRA. He is aware of economies of scale and that electricity would be cheaper for everyone if distributed over a bigger transmission grid that a smaller one," Osmeña added.

Osmeña proposes a workshop sponsored by the Department of Energy to bring all stakeholders up to speed on progress made in developing the electricity sector and to agree on short-term and long-term solutions to the power needs of Mindanao. "We must all begin to read from the same page. We will only have ourselves to blame if these problems continue to fester," Osmeña declared. (PNA)



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