PNoy, JCPC urged to defer sale of Agus, Pulangi plants

CAGAYAN DE ORO City, June 2, 2011—The Coalition of Mindanao Power Consumers (CMPC) is urging President Benigno Simeon C. Aquino and the Joint Congressional Power Commission (JCPC) to defer the sale or privatization of the Agus and Pulangi Hydro Power Plants in Mindanao.

In a resolution, the CMPC, headed by Mylven D. Eballe said that “the best evaluated solution” to the Mindanao power crisis “is not necessarily the immediate sale of the aforementioned plants but the unbundling of the NPC-Mindanao Power Rates in order to attract more investors in the generation sector.”

The Agus and Pulangi Hydro Power Plants produced about 900 megawatts (MWs) of combined power, which is more than 50 percent of the total installed power capacity of Mindanao.

“Its immediate privatization could most probably result into a private monopoly which will then dictate the cost of power in the island,” the CMPC said.

President Aquino, however, said in his recent visit to this city that his administration intends to pursue the privatization of Agus and Pulangi as mandated by the Electric Power Industry Reform Act (EPIRA).

Aquino warned that Mindanao residents could be paying higher electricity rates next year when the government ends the exemption of Mindanao National Power Corp. plants from privatization as he does “not want to lie to anybody, especially to people who I considered my boss.”

“The exemption I understand is finished by this year. I beg for your understanding but it does not make sense to continue producing any product and selling it at a loss to be passed on to other people,” he said in his speech before representatives of civil society organizations in a dialogue.

Section 47 of EPIRA states that 10 years after the EPIRA has passed into law, power assets may already be sold to private investors. This means that the Agus and Pulangui hydroelectric plants may be privatized by June 2011.

But Eballe said the President was “ill- advised” on the power situation of Mindanao.

“It is not true the power rates in Mindanao are subsidized,” he said, adding: “On the contrary, it is the Agus and Pulangi plants which are producing a surplus of revenues for the Power Sector Assets and Liabilities Management Corporation (PSALM), which now manages the assets of the National Power Corporation (NPC).”

Eballe said there is a growing fear in Mindanao of a repeat of the 8-hour brownouts last year with the privatization of NPC’s Power Barges (PB) 117 and 118, which also resulted to the skyrocketing of electricity rates across the island at the height of the power crisis last year.

“The recent sale of the two NPC power barges has caused all the Mindanao power consumers to suffer a rate-shock, and would certainly be repeated and aggravated if the sale of the Agus-Pulangi Hydro Plants will push through now,” he said.

He stressed it is for Mindanao’s best interest to defer “for another ten years” the privatization of Agus and Pulangi power plants “pursuant to the recommendation of the Regional Development Council, Region 10; the Department of Energy, and House Resolution No. 77.”

House Resolution 77, recently passed by Congress, urged PSALM to defer the sale and privatization of the Agus and Pulangi power plants.

The Agus and Pulangi power plants “make Mindanao attractive to foreign and local investors” because it provide “all the Mindanawons the cheapest source of electric power,” Eballe said.

But proponents of the privatization said that selling Agus and Pulangi is the answer to the impending power crisis in Mindanao.

However, Senator Francis Joseph “Chiz” G. Escudero, a member of the JCPC, said it is not to the best interest of Mindanawons if government pursues the privatization.

“If one or two companies will buy the Agus and Pulangi complex, a monopoly will result. They then can dictate the prices of electricity here in Mindanao,” he said, adding that “privatization is not the answer to the crisis.”

If government is really bent on following the spirit of EPIRA, it should encourage competition, which he said is “the root and fruit of the Electric Power Industry Reform Act of 2001.”

But competition is not always the fruit of privatization, he stressed.

“There is no competition if we open one area and create a monopoly. A monopoly is good if it is the government. But in the hands of the private sector, monopoly is a tool of abuse,” he said. (Bong D. Fabe)