Gov’t must be decisive in tackling power crisis in Mindanao—senator Recto

MANILA, Philippines—The government should decide whether or not it should privatize all state-owned power utilities in the country amid the power crisis being experienced in Mindanao, a senator said Tuesday.

“A piecemeal approach in the power situation in Mindanao might not be the proverbial light at the end of the tunnel. It’s either all power plants are privatized or all should remain under government control,” Senator Ralph Recto, chairman of the Senate committee on ways and means, said in a statement.
“The government should decide once and for all. A half-baked approach in the Mindanao power situation won’t do,” Recto added.

Malacanang has announced it would consider privatization of the Agus and Pulangi hydropower plants as a way of addressing the lack of power supply in Mindanao.

But Recto said privatizing some while keeping other power plants under state hand might only cancel out each other’s desired benefits.

He also pointed out what he described as the government’s “dismal track record” in operating power plants.

“A record not bound to improve further once it decides to continue keeping the other power plants under its control,” said the senator.

Should the government opt for a wholesale privatization plan, Recto said the Department of Energy (DoE) and the Energy Regulatory Commission should step in to ensure the right energy mix in Mindanao for optimum capacity and efficiency.

“We may forego dreaming of reduced power rates soon but we could surely expect a stable supply at steady prices to attract more manufacturing players in Mindanao,” he said.

“We don’t want very expensive power rates in Mindanao or any part of the country. But if it can’t be lowered soon, we just want the assurance that power rates would remain steady and predictable. Can we maintain power rates at P10 per kwhr until 2016?” asked the senator.

This was the reason why during a budget hearing last year, Recto said he requested the DoE to submit a power rate scenario “to show how the power rates will look like over the years.”

But the senator said that DoE never submitted such power rate scenario.

“It’s not enough to promise fewer or no brownouts, the government must also show how the rates will behave over the years,” Recto said.

To placate opposition from the local government units (LGUs), Recto said the government may offer to remit directly their shares from the power plants’ revenues instead of the present practice of drawing it from the DoE, the national government.

LGUs hosting a power plant receive a percentage from the revenues of the operators.