Aquino willing to dialogue on Mindanao power supply

Benigno Aquino III

President Benigno Aquino III said he was willing to conduct further dialogues with the stakeholders in Mindanao’s power industry but indicated that the entry of private investors was still the best way to go in ensuring a sustainable supply of electricity on the island.

After sharing the administration’s preference for the private sector taking over power plants in Mindanao at the energy summit last week, Mr. Aquino yesterday said he didn’t expect stakeholders to be readily convinced of government plans in just one round of discussions.

Mr. Aquino made the statement after consumers and business and political leaders in Mindanao were disappointed with his response to the power supply shortfall on the island. They said the sale of government-owned power barges was the primary cause of the power shortage.

Marbel Bishop Dinualdo Gutierrez said on Sunday that it was unfair for the people in Mindanao to suffer from the consequences of the government’s negligence and wrong policies that led to the power crisis.

Mr. Aquino said at the summit that the days of cheap electricity in Mindanao were over and that consumers would have to pay “a little more” in exchange for a steady supply of power.

“It’s rather obvious if we just open our minds a little,” he said when asked if he believed he could convince many stakeholders who oppose the privatization of power assets in Mindanao.

“That was historical data. They were exempted from the [Energy and Power Industry Reform Act]. This is now the situation. How can we change the situation when we won’t change the system that has been in existence for so long?” he added.

The President’s call for people to have an open mind drew sharp retorts from residents of Mindanao.

Open heart, mind

In Davao City, Dr. Jean Lindo, convenor of the group No to Coal, said Mr. Aquino was the one who needed to have an open mind.

“Isn’t an open mind demanded more of the President? Apparently, he has not opened his heart and mind to the very people who propelled him to power,” said Lindo, among those opposing a proposed coal-fired plant in Davao City.

“The people of Mindanao appealed to him not to privatize what has remained of the public utilities, and instead to opt for a sustainable energy solution, among the best solutions. Now, he tells the people to be open-minded? Pathetic,” Lindo said.

Allan Delideli, executive director of the indigenous people’s nongovernmental group Sildapse, said it was the President who was not open-minded.

“Instead of the government taking control of the situation and strengthening the country’s energy mix by tapping renewable energy, the government is selling everything to the private sector,” Delideli said.

The President reiterated the need to have the private sector invest in Mindanao’s power industry for a reliable source of electricity.

“If you’re [a private company] you’d have an allowance for depreciation to replace those that would be damaged, also to upgrade. You’d have to reinvest to upgrade and be more efficient,” he said.

Such an allowance would be uncertain if it has to be taken from the national budget, Mr. Aquino said.

“There will be a vicious cycle of fearing a rate hike and you won’t have funds for replacements or upgrade. So there will come a time when the installed capacity would drop… There will be less electricity and we’d have to accept electricity at whatever price,” he said.

“And that’s what we’re avoiding,” the President added.

The privatization of power assets is one of the provisions in the Epira. The sale of assets of the state-owned National Power Corp. (Napocor) will be used to pay for its huge debt while the private sector is expected to ensure an efficient supply of power.

Mindanao, however, has been exempted from the Epira over the past decade due to its high supply of power at the time the law was passed.

Against privatization

Told of the plan by Mindanao leaders to formally submit their opposition to the privatization of the Agus-Pulangi hydroelectric power plants, the President said, “I never said that I was totally in favor but there are many plants that were privatized in Luzon.”

“I remember these plants have increased their available capacity beyond their installed capacity,” Mr. Aquino said.

He said he would determine whether the manifesto against the privatization of the hydroelectric power plants was reasonable.

“I will read it. But when I was there [in Mindanao], when I saw several governors, none of them told me that,” he said.

“We will see how reasonable their arguments are, then I’m open to discussing it further with them. But… I’m assuming that the Epira law allows us to further delay the privatization of these  [Napocor] assets,” he added.

Huge subsidy

The President noted that the government was subsidizing power in Mindanao “to a degree” as shown by the P2.6-billion cost of repairs of the Agus hydroelectric power plant.

He said subsidies were not encouraging energy conservation by  consumers “so we’d return to the problem of how we can generate all that demand.”

“And when you give that kind of subsidy, when you already have to withdraw the subsidy, the public would, of course, complain,” he  said.

Solar power costly

He said the government was also looking at renewable energy such as solar power but added that solar energy would entail a higher cost for consumers.

“Presently, the price of electricity from solar is quite high… It’s not a problem whether we would adopt solar, biomass, etc. With solar, I’m sure there will be a huge increase in the price of electricity,” Mr. Aquino said.

“Would the consumers be willing to pay for clean energy?” he added.

The President said Mindanao’s reliance on hydroelectric power was no longer sustainable because of the changing rainfall patterns in the area.

While coal and oil may be bought to maintain the power supply from power plants fueled by such resources, it was not as easy for those powered by water from dams.

“If the dams aren’t replenished by the rains, you’ve no choice but to be sorry,” he added.

Mr. Aquino said Pagasa had said there would be decreased rainfall in Mindanao.

Bayan Muna party-list Representative Teodoro Casiño said Mr. Aquino’s call for Mindanao to “pay more” for electricity would make its people even a lot poorer, as the island would lose its comparative edge in attracting investors.

“The premise that Mindanao has been unjustifiably enjoying  ‘cheap’ power rates is totally wrong,” Casiño said. “True, Mindanao has lower power rates than Luzon and the Visayas but it is actually paying much more than most major cities in Asia.” With a report from Gil C. Cabacungan