Saturday, March 31, 2012

Steady power supply for Davao may mean higher rates–official

By Orlando B. Dinoy
Inquirer Mindanao
10:16 am | Saturday, March 31st, 2012

DIGOS CITY – Power consumers here may continue to enjoy uninterrupted electricity supply despite the reported power crisis but may have to endure higher power cost, the Davao del Sur Electric Coop. (Dasureco)
Engineer Godofredo Guya, Dasureco general manager, said the power cooperative was struggling – like other Mindanao coops – to prevent long hours of outages and that move would include sourcing power from fuel-based sources.
Guya said with the plan of the National Power Corp. (Napocor) to shut down the Pulangui 4 hydro system in Bukidnon for maintenance from April 9 to May 9, the supply of electricity to Dasureco’s 95,000 consumers would also be affected unless more sources were tapped.
“The plant shutdown will mean a 120-negawatt shortfall,” he said.
Granting that the claim of the National Grid Corp. about a 179-MW shortfall in Mindanao was true, Guya said the shut down of the plant would result in a total of 299-MW shortfall for the Mindanao grid.
This would mean, he said, that NGCP would implement more load curtailments that would burden the consumers more – long hours of power outages.
“The expected gap is to be filled in by the entry of 100-MW more of available capacity from power barges 117 and 118,” he said.
Power barges 117 and 118, which utilize diesel fuel, are owned by Therma Marine Inc. (TMI), a subsidiary of Aboitiz Power Corp.
Guya said in the case of Dasureco, the power coop has been trying to prevent outages in the province by sourcing electricity from private power producers, including TMI.
That contract with TMI, he said, had increased power rates here to P9 per kilowatt hour.
When Dasureco was still heavily relying on the Pulangui and Agus hydro systems, consumers only had to pay P6 per kilowatt hour.
Guya said because of the repair of the Pulangui 4, Dasureco would be increasing its 12 MW contract with TMI.
“We are planning to have an additional 6 MW contract with TMI to make our volume of drawn power to 18 MW. This would help us in minimizing the required hours of load curtailment,” Guya said.
When Dasureco contracted additional power from other sources, the rate became P9.
Guya said the additional supply from TMI would mean that Dasureco consumers would have to pay P10/KWH.

Energy Bills Frozen

Measures Stuck In House Panel
March 31, 2012, 4:27am

Over 40 bills and resolutions that address the power crisis and the runaway prices of fuel and electricity have been gathering dust in the House of Representatives’ Committee on Energy, but there appears to be no urgency to act on them, despite the looming power crisis in Mindanao.

Records in the House show that the energy committee has not conducted hearings on several bills, some of which were filed a few days after the 15th Congress opened in July 2010.

The committee is headed by Batanes Rep. Henedina Abad, wife of Budget Secretary Florencio Abad.

Congressman Abad’s committee holds in its hands the fate of at least 20 bills and another 20 proposed resolutions seeking to address the energy crisis.

Among the measures are proposals seeking to amend or repeal Republic Act 9136 or the Electric Power Industry Reform Act of 2001 and Republic Act 8479 or the oil industry deregulation law.

Bills seeking to cut power rates by utilizing government share in the discovery of indigenous energy sources and the return of the oil price stabilization fund have also been idled.

Also pending are proposals for the mandatory inspection of gasoline station pumps to prevent owners from shortchanging motorists.

Resolutions asking the Department of Energy to draw up a plans to avert the Mindanao power shortage were filed way back in 2010.

San Juan Rep. JV Ejercito confirmed that the committee has not tackled the bills that would have averted the oil and energy crises or cushioned their impact on the public.

"Actually, I am myself surprised why the Committee on Energy has not acted on the impending power crisis by at least conducting hearings," Ejercito said.

Ejercito wrote House Bill 3267 which proposes amendments to RA 8479 that would address supposed abuses committed by oil companies. The proposal was filed on September 17, 2010, three months after the 15th Congress opened.

Navotas Rep. Tobias Tiangco, a partymate of Ejercito in the Partido ng Masang Pilipino, said his proposal, HB 3190, is among the bills that the House panel has been sitting on.

HB 3190 proposes the removal of allowable system losses that private utility companies recover from consumers by adding the amount to their bills.

Bayan Muna Rep. Teddy Casino said the problem could be traced to the fact that the House committee "does not want to tangle with the executive on policy matters."

"This is the problem when a committee chairperson has close personal and political ties with the Palace – it loses its independence," Casino said, adding, "This was true of the previous chairperson as well."

Casino was referring to AGAP Partylist Rep. Juan Miguel "Mikey" Arroyo, son of former president and now Pampanga Rep. Gloria Macapagal Arroyo.

Casino acknowledged that the young Arroyo, who was House energy committee chairman during the 14th Congress, had acted on many pending measures by calling for hearings although the legislative accomplishment remained wanting.

"If the energy committee were to take its role as a check and balance seriously, it cannot but be adversarial to the administration and would have raised hell a long time ago and demanded swifter and more decisive actions from the Palace," he said.

Casino said Abad has been "defaulting on the opportunity to radically change the policies of privatization and deregulation," two issues that led to "chronic shortages and high prices of power."

Representative Abad is a senior leader of the Liberal Party, the party of President Benigno S. Aquino III.

Liberal Party member and Quezon City Rep. Winston Castelo shared the misgivings of Ejercito and Casino but assured the Manila Bulletin he would write his partymate to inquire about the pending bills.

Castelo filed House Bill 5295 that sought the repeal of the oil deregulation law. The proposal was sent to the energy committee in September 2011.

Meralco Also Adjusting Power Charges

Manila Bulletin
March 31, 2012, 4:07am

Manila, Philippines - Apart from the nationwide increases in the generation charges of the National Power Corporation (NPC), power utility firm Manila Electric Company (Meralco) announced that it will also be increasing its charges by up to P0.0476 per kilowatt hour (kWh) for its local franchise tax recoveries.

The total franchise taxes to be recovered by Meralco from customers would be P1.58 billion, which it paid to various provinces and cities within its franchise area.

These include the provinces of Bulacan, Batangas, Cavite, Laguna and Rizal; while the cities are San Jose del Monte, Batangas, San Pablo, Tagaytay, Lucena, Mandaluyong, Marikina, Quezon, Caloocan, Pasay, Las Piñas, Manila, Calamba and Pasig.

Based on the ruling of the Energy Regulatory Commission, the amount to be recouped by Meralco will range from P0.0007 to P0.0476 per kWh.

"This recovery, which covers the years 1994-2004, will only be reflected in the customers’ bills starting this May," the utility firm has noted in a press statement.

Meralco qualified that "the decision came after several years of regulatory evaluation and the conduct of hearings beginning December 10, 2001, when the company asked the regulator for authority to adopt a local franchise tax adjustment clause."

It added that "the decision covers local franchise tax payments by Meralco to LGUs from as early as 1993." The ERC has emphasized that local franchise taxes "are legitimate expenses, which the law allows to be recovered from the customers."

On the hike in NPC’s rates, Meralco underscored that the P0.69 per kWh for Luzon will be "diluted" in the final pass-on rate to its customers.

"Meralco customers will not feel the full impact of the adjustment," Meralco utility economics head Lawrence Fernandez said.

He further explained that "the NPC increase will be diluted to only about P0.28 per kWh for Meralco residential customers" since the distribution utility sources just about 40-percent of its supply from NPC.

Fernandez similarly noted that when Meralco’s bilateral power supply contracts with the private generators will already be approved by the ERC, the pass-on impact of the NPC rate adjustments would be eased further.

"Until the new bilateral contracts are approved by the ERC, the TSCs (transition supply contracts) assigned to them were extended, so the ERC-approved NPC rate will apply in the meantime," Fernandez said.

The cost mitigating effect of the NPC adjustments, he expounded, is partly due to Meralco’s strategy of diversifying its power supply procurement.

"Meralco sources its power requirements from several generators, with NPC being one of them," Fernandez noted, adding that the company tries to "come up with strategies to obtain the right mix of power from these different sources that will result in the most reliable and reasonably-priced power for our customers."

Green groups urge gov’t to push long-delayed policy on renewable energy

By Kristine L. Alave
Philippine Daily Inquirer
1:52 am | Saturday, March 31st, 2012

Environmental groups are urging the government to make up its mind on the long-delayed feed-in-tariff (FIT) policy, claiming it would be the key to attracting more investments in renewable energy development that would lead to cheaper power rates in the long run.
The feed-in-tariff scheme has been on the drawing board for three years. Under the proposed scheme, companies that invest in developing renewable energy sources are guaranteed returns on their investment through long-term contracts and price certainty in the form of a fixed cost rate (the FIT) to be levied on electricity consumers.
Under the scheme, distribution utilities would be required to buy electricity generated from renewable energy sources at prices that are determined as a percentage of the prevailing retail price of electricity. The government would set a fixed rate that consumers would pay for the power generated by renewable energy generators over a set period.
“Talks about the FIT have been dragging on for a year. There is no new renewable energy project that is being implemented,” said JP Agcaoili, a campaigner for Greenpeace.
Locked in with coal
“While the discussions on [FIT] drag on, the coal [plants] proposals are coming in and are approved. While the rest of the world is moving to renewable energy, we are locked in with coal,” Agcaoili said.
“What’s stalling them?” asked Eric Alvia, director of the Center for the Advancement and Utilization of Sustainable Energy, referring to the Energy Regulatory Commission, the power regulatory body.
A FIT system for electricity produced from renewable energy sources is mandated in the Renewable Energy Act of 2008. The ERC, in consultation with the National Renewable Energy Board, was supposed to formulate and promulgate the rules for a FIT system in 2009.
The proposed feed-in-tariff rates are P7 per kilowatt hour (kWh) for biomass, P17.65 per kWh for ocean technology, P17.95 per kWh for solar power, P6.15 per kWh for run-of-river hydropower and P10.37 per kWh for wind power. The rates are estimated to add roughly P0.12 per kWh to consumers’ electricity bills.
Lower rates
Alvia believes an FIT policy regime would attract renewable energy investors to the Philippines, and thereby boost the country’s supply of “green” power and reduce the demand for coal and fossil-based fuels.
It would also lure businessmen into rehabilitating aging geothermal and hydro-power plants in Mindanao, which is currently experiencing rotating power outages.
He claimed an FIT regime would have the same effect as the laws that liberalized the airline and telecommunications industries.
“The prices for the fares and the rates went down, the penetration rates for cell phones went up, the demand for landlines went down,” he said.
“I’m sure if they do that, people will have an incentive to shift their energy needs from coal,” Alvia added.
The Department of Energy has already approved a 760-megawatt (MW) installation target for renewable energy projects under the FIT scheme. It is composed of 250 MW each for hydroelectricity and biomass, 200 MW for wind power, 50 MW for solar energy and 10 MW for ocean technology.
Cheaper in the long run
But Greenpeace, which sits on the National Regulatory Energy Board, complains that the installation target set by the government is too low, well below what renewable energy investors would be interested in developing.
There has been a lot of opposition to the FIT scheme as it would substantially add to the cost of power in the country, which already has one of the highest electricity rates in the world.
According to the green energy advocates, renewable energy would be expensive in the first few years as the technologies are relatively new compared to coal-fired plants.
However, the clean technologies would be cheaper in the long run because it has a minimal impact on the environment and is not dependent on the movement of fossil fuels in the world market, they said.
The price of coal and fossils fuel will always increase, and the latest price hike announced by Meralco reflected that, Alvia said.
Abundance of green energy
According to the environmental groups, there is an abundance of green energy sources in the Philippines. They said the country can harness energy from the sun, the wind and the tides and from geothermal and biomass sources to meet the power demands of its growing population.
The Philippines also has vast tracts of agricultural land as well as sunny and windswept coasts for power where renewable energy installations can be built, they said. In its energy roadmap, Greenpeace said Mindanao, whose power at present comes mainly from geothermal and hydropower plants, has great potential to harness wind energy.
According to the Department of Energy, about 35 percent of the country’s energy comes from renewable sources.
Greenpeace said the Philippines can increase its renewable energy capacity to 50 percent by 2020.
First posted 12:31 am | Saturday, March 31st, 2012

High power bills wreak havoc on family budgets

By Amy R. Remo
Philippine Daily Inquirer
1:51 am | Saturday, March 31st, 2012

For Francis Mainar, the reasons why he will have to pay higher electricity bills come May are irrelevant.
The 32-year-old security guard, who lives in Cavite province with his wife and three children, lamented that any increase in power prices can only mean one thing for his family: spending less and further lowering, again, their consumption of electricity.
As it is, Mainar said he spends an average of P1,600 a month on electricity, almost half his entire net earnings for one month. That amount covers his family’s daily use of television, refrigerator, electric fan and lights.
“We have no choice but to cut down on our consumption even further,” Mainar said, lamenting that consumers like him really are quite helpless in the face of the unrelenting rise in power rates.
Mainar is only one of about 5 million customers of electricity distributor Manila Electric Co. (Meralco), which announced Thursday that it will be collecting an additional generation charge of 69 centavos per kilowatt hour (kWh) and up to 4 centavos per kWh, representing the collection by the utility of local franchise taxes.
The Energy Regulatory Commission this week allowed the state generator, National Power Corp. (Napocor), to increase its generation charge in Luzon by 69.04 centavos per kWh, Visayas by 60.60 centavos per kWh and Mindanao, by 4.42 centavos per kWh. These amounts will be collected by distribution utilities from end consumers within the next eight to 10 years.
These approvals covered the joint applications filed by Napocor and the Power Sector Assets and Liabilities Management Corp. for a rate increase under the generation rate adjustment mechanism (GRAM), which allows utilities to recover costs associated with fuel and purchased power, and incremental currency exchange rate adjustment (Icera) mechanism, which allows utilities to recover foreign exchange-related costs.
The ERC followed this up with the approval of Meralco’s own petition, which will allow the distribution utility to collect a total of P2.3 billion over the next five years, representing the local franchise taxes it had paid to the local governments over the past decade.
Meralco has assured its 5 million customers that they will not be bearing the full brunt of the 69-centavo-per-kWh increase in the generation charge in Luzon.
Lawrence Fernandez, Meralco’s utility economics head, explained that the Napocor increase will be diluted to only about 28 centavos per kWh for Meralco residential customers since the distribution utility sources only a portion of its power requirements from Napocor.
Failure of gov’t policy
These rate hikes are the reason why Mainar and his family will have to scrimp and save to stop their monthly power bill from further shooting up. For instance, Mainar said his family will now have to use lights only after dark and the electric fan only for a few hours at night.
These are also why a number of militant and civil society groups are now up in arms over the country’s overall energy situation, which they blame on the failure of government policy.
In separate statements on Thursday, the Freedom from Debt Coalition, Bagong Alyansang Makabayan (Bayan) and the activist fisherfolk alliance Pambansang Lakas ng Kilusang Mamamalakaya all pointed to the Electric Power Industry Reform Act of 2001, which they said failed to deliver its promise of lower power rates.
The Epira, or Republic Act No. 9136, deregulated and privatized the country’s power and energy sector.
Party-list House member Teddy Casiño (Bayan Muna) said there was a need to reverse the effects of Epira, claiming it was the root cause of the shortages and high electricity rates that have characterized the industry for the past two decades.
“Our problems really started when the government started passing the responsibility of building power plants to private corporations. This reached absurd heights during the Ramos administration, when Congress gave the former President emergency powers to negotiate sweetheart contracts with private companies, resulting in onerous terms like the take-or-pay conditions of the independent power producers (IPPs),” Casiño said in a statement.
“Today, we are at the total mercy of these powerful monopolies in the power sector, which have the ability to manipulate supply and other mechanisms to maximize their profits. This is why we have the highest electricity rates in Asia,” he said.
‘Electrifying protest’
Bayan on Friday called on the Aquino government to remove the value-added tax on electricity, saying this would provide immediate relief to power consumers reeling from escalating prices.
“Malacañang is not powerless to bring down power rates. It can push for the removal, suspension or reduction of the VAT on power rates which will greatly benefit consumers. It should be considered especially for Mindanao consumers whose only option now is to source power from more expensive barges,” said Bayan secretary general Renato M. Reyes.
He said Meralco customers using 100 to 300 kWh of electricity a month would experience a monthly reduction of P70 to P290 in their monthly electricity bills.
Pamalakaya warned that the anounced power rate hike this May was like an invitation to Filipinos to stage a nationwide “electrifying protest.”
“President Aquino is inviting a major political showdown with the people. Let us see how this insensitive presidency of Mr. Aquino will fare against the collective outrage of consumers across the nation,” said Pamalakaya chair Fernando Hicap.
House bill filed
At the House of Representatives, San Juan Representative Joseph Victor Ejercito has filed House Bill No. 6014 exempting petroleum products from the 12-percent VAT to provide immediate relief to motorists.
Ejercito, chairman of the House committee on Metro Manila development, said classifying petroleum among the VAT-exempt products was a more efficient and effective alternative to the government’s subsidy program, the Pantawid Pasada Program, which gives public transport owners discounts on their fuel purchases.
“Neither the bus, jeepney and taxi operators nor drivers agrees it is the solution to the skyrocketing cost of gasoline, diesel, kerosene and LPG. It does not benefit the people at all,” he said.
On concerns of the government that removing the VAT would reduce tax collections, Ejercito claimed that the government’s share from the
P45-billion annual income of Philippine Amusement and Gaming Corp. (Pagcor), P31-billion income of Philippine Charity Sweepstakes Office (PCSO) and P43-billion royalties from the Malampaya gas project would be “sufficient to replenish the lost revenues.”
Ejercito noted that the VAT was imposed in 2004 to boost revenues and lower the government’s dependence on borrowings that were pegged at 78.2 percent debt to the gross domestic product ratio. With the debt-to-GDP ratio falling to 55.4 percent, Ejercito said it was time to reconsider the VAT as it has already served its purpose.—With a report from Gil Cabacungan

Alsons earnings up 20% to P450M in '11

By Neil Jerome C. Morales (The Philippine Star) Updated March 31, 2012 12:00 AM

MANILA, Philippines - Earnings of Alcantara-led Alsons Consolidated Resources, Inc. (ACR) surged 20 percent to more than P450 million last year on the back of higher energy sales.

ACR is banking on the acquisition of a diesel-fueled power plant in Iligan to further increase profits this year.

“Net income attributed to the parent grew by 20 percent to P456 million in 2011 from P378 million in 2010,” ACR said in a disclosure to the stock exchange. Earnings per share rose to P0.072 per share from P0.06 in the previous year.

Higher profits were backed by the eight-percent growth in consolidated revenues to P2.94 billion last year from P2.71 billion a year earlier.

“Energy fees from its power subsidiaries continued to comprise more than 70 percent of these revenues, with the balance accounted for by property subsidiary Lima Land Inc.,” ACR said.

ACR’s energy and power businesses are held by Conal Holdings Corp., Mapalad Power Corp. (MPC), Sarangani Energy Corp. (SEC), Alsing Power Holdings, Inc., Alsons Power Holdings Corp., (APHC), Northern Mindanao Power Corp., and Alto Power Management Corp.

For this year, its income will be boosted by the acquisition of the former Iligan diesel power plant, said ACR chairman and president Tomas I. Alcantara.

“Once MPC takes over the idle plant, it can rehabilitate the plant and bring it up to full 102-megawatt (MW) capacity in six months,” Alcantara said.

ACR said the city government of Iligan took over the 102-MW diesel plant from National Power Corp. in 2010. MPC won the public auction for the power plant in 2011.

Alcantara said the rehabilitation will increase total output of ACR while bringing in additional power generating capacity to Mindanao, which is facing one to three hours of rotating brownouts given a supply shortfall.

Early this month, ACR said it needs around $560 million to build a 200-MW coal-fired power plant in Mindanao.

The project, located in Maasim, Sarangani province, is expected to add to the power capacity in the Mindanao grid by June 2014. It will be undertaken by subsidiary SEC.

Subsidiary APHC has around 20 percent stake in Australia-listed Indophil Resources, which holds a 37.5 percent stake in the $5.9-billion Tampakan project, Southeast Asia’s largest undeveloped copper-gold prospect.

Investors swamp DOE bid for coal contracts

By Neil Jerome C. Morales (The Philippine Star) Updated March 31, 2012 12:00 AM

MANILA, Philippines - Investors flocked yesterday to the Department of Energy’s bidding for service contracts for coal projects across the country.

The DOE said projects that will proceed to commercial production will help supply the coal demand of the country, a net importer of coal.

DOE Undersecretary Jose M. Layug Jr. said the Philippine Energy Contracting Round 4 (PECR 4) generated 69 bids for 38 blocks of coal projects.

“It is a good indicator. We have not attracted only old players but also new ones,” he said.

“You are seeing a lot of new parties in the list, half of that we do not know of,” he added.

Some of the coal blocks offered are located in Panukalan in Quezon, Rapu-Rapu Island in Albay, Bulalacao in Oriental Mindoro, Calatrava in Negros Occidental, Toledo in Cebu, Inabanga in Bohol, Magsaysay in Misamis Oriental, Bislig in Surigao del Sur, Nabunturan in Compostela Valley and Trento in Agusan del Sur.

Among the firms that submitted bids include existing players Philippine National Oil Co.-Exploration Corp. and (PNOC-EC), Semirara Mining Corp., and Benguet Corp., while new players include Superfine Mines and Minerals, Mega Philippines Inc. and Green Quezon Prime.

Layug said the benchmark investment is about $2.5 million for the two-year exploration of a coal block. The exploration permit is renewable for another two years.

He said the country’s coal output is only seven million metric tons (MT) per year, which is not enough to support the nation’s annual demand of 12 million MT.

Of the country’s production, three million MT are sold abroad, prompting power generators and cement plants to buy coal in countries like Indonesia.

The DOE has cut off the submission of pre-qualification documents for the PECR 4 last Feb. 29. Layug said coal blocks that did not receive offers will be offered in the next PECR.

Power rate hike lower in Metro

By Neil Jerome Morales (The Philippine Star) Updated March 31, 2012 12:00 AM

MANILA, Philippines - The increase in electricity rates triggered by the higher cost of energy supplied by the National Power Corp. (Napocor) will be less in areas serviced by the Manila Electric Co. (Meralco).

“The Napocor increase will be diluted to only about 28 centavos per kilowatt-hour (kwh) for Meralco residential customers since the distribution utility sources only a portion of its power requirements from Napocor,” said Meralco utility economics head Lawrence Fernandez.

He said Meralco sources its power requirements from several generators to secure the right mix of power. Meralco areas cover Metro Manila and nearby provinces.

On March 26, the Energy Regulatory Commission (ERC) allowed Napocor and the Power Sector Assets and Liabilities Management Corp. (PSALM) to charge 69.04 centavos per kwh more in Luzon to enable them to recover costs incurred from 2007 to 2010.

Under the Electric Power Industry Reform Act of 2001, Napocor and PSALM may apply for generation rate adjustment mechanism and incremental currency exchange rate adjustment to recover costs. The adjustments are then passed on to consumers.

“As directed by the ERC, the adjustment will be reflected in Napocor’s April bill to Meralco. In turn, this will be reflected in the May bill of consumers as an adjustment in the generation charge,” Meralco said.

Meralco will collect the generation adjustment from customers on behalf of Napocor and PSALM.

On Thursday, the ERC said Meralco can start collecting in May P0.0007 to P0.0476 per kwh from its customers. This will also allow Meralco to recover local franchise taxes it paid to the local government as early as 1993.

Meanwhile, Meralco said it has already filed a petition for the verification of its Maximum Average Price for regulatory year 2013 and its translation into distribution rate structures for its various customer classes.

The filing is in line with the Performance-Based Regulation (PBR) of the ERC. “Under PBR, distribution utilities like Meralco have to submit to an annual verification of its tariffs under PBR,” the company said.

The petition will then be subjected to public hearings and ERC scrutiny.

Meralco, the country’s largest power distributor, had 5.3 million customers last year, up 3.7 percent from a year ago. – Neil Jerome Morales

Palace: Long-term power plans in place

By Aurea Calica (The Philippine Star) Updated March 31, 2012 12:00 AM

MANILA, Philippines - Long-term solutions to the energy crisis in Mindanao are in place and there is no need to grant emergency powers to President Aquino, Malacañang said yesterday.

Presidential spokesman Edwin Lacierda said Sen. Sergio Osmeña III has made clear why Mindanao is suffering from a power crisis and why residents must now pay more for electricity.

“By 2014, we already have sufficient power supply. It’s only 2012 and 2013, but those can be addressed right now with a blend of energy sources. So that’s the reason why he (Aquino) doesn’t see the need for emergency powers because in the long term, you already have those concerns addressed by 2014,” Lacierda said.

“We’re fixing the energy situation, we’re putting the power supplies. It’s just a matter of blending, at what cost will it be palatable to the people of Mindanao. So there’s a solution to that problem already and it’s a blending of costs of various sources of energy,” Lacierda said.

He added that electric cooperatives have already contracted power barges to supply additional electricity.

Osmeña said consumers in Mindanao have been “spoiled” over the last decade by subsidized power and would have to pay higher rates now that the power sector is in the “intensive care unit.”

“With respect to the power situation in Mindanao, we will be having a Mindanao summit that the President mentioned and he will be talking to the stakeholders in Mindanao,” Lacierda said.

“It’s a problem that Sen. Serge Osmeña has already outlined in his interview with the media and it shows where, what the government is doing. It also shows the cost of energy if all the sources of energy have blended in. And according to Serge Osmeña, it’s around 50 cents increase only,” Lacierda said.

Lacierda said Mindanao had been enjoying the lowest power rates because of their hydroelectric power plants, thus it was exempted from privatization under the Electric Power Industry Reform Act (EPIRA).

But when the Aquino administration came in, Lacierda said Energy Secretary Rene Almendras had made an assessment about the power situation in Mindanao and met with Mindanao lawmakers.

“He (Almendras) spoke to the power producers. It was only in 2011 that new power plants were constructed,” Lacierda said.

Lacierda said some of the long-term solutions to the power crisis in Mindanao included the repair of the Agus 6 hydroelectric power complex and the construction of new coal-fired power plants.

He said they did not want to blame past administrations anymore and started the rehabilitation of Agus 6.

“I think, at present the Agus plant is only generating 30 percent of its capacity because of the (59-year-old) machines or engines. So that’s being rehabilitated. That should have been done before, but was not,” Lacierda said.

Lacierda said there is no plan to revive the Bataan Nuclear Power Plant, especially in the wake of the nuclear crisis in Japan after an earthquake and tsunami last year.

“We have to restudy the whole issue on nuclear energy. The safety concerns are there,” Lacierda said.

Lacierda said by 2014, there would be no power shortage in Mindanao because of the new power plants.

“It’s only 2012 and 2013, we need to address that and that’s the reason so why we need to put in the power barges and blend it with the other energy sources. The power barges are expensive if it’s used the whole time, and it’s not going to be used the whole 12 hours; it’s going to be used at peak hours and so that’s the reason why the costing will not be as high as feared. But certainly if you want to have power, you have to pay for power,” he said. Lacierda said the power summit was convened to deal with the concerns of all stakeholders, including local officials who were opposing some of the national government’s measures to address the power situation.

In some areas in Mindanao, Lacierda said there was power outage because of the financial constraints of cooperatives and problems on collection. “But overall, the Department of Energy has already done mandatory curtailment so the power outages (will be rotating),” he said.

Lacierda said the Mindanao situation would need the cooperation of everyone and it would not help if one local government official would be obstructionist.

He said Interior and Local Government Secretary Jesse Robredo would make sure they were on board during the power summit after the Holy Week.

“And that’s the reason why we are urging everyone in Mindanao, all the stakeholders in Mindanao, to cooperate because there is a solution; it takes the cooperation of not only the people but also the local government officials in Mindanao,” he said.

Meanwhile, Sergio Dagooc, president of the Association of Mindanao Rural Electric Cooperatives (Amreco), denied that the power crisis in the South is the fault of local electric cooperatives, contrary to the claims of Osmea and Almendras.

He said the reason the Amreco members are being blamed was the reluctance of the cooperatives to fully use 200-megawatt capacity generated by independent power producer Therma Marine Inc. in Mindanao.

Dagooc said said that the bulk of the power generated by Therma Marine’s two power barges have already been under contract to supply several other electric cooperatives. He said Therma Marine’s power is already being distributed to local customers by utilities Davao Light and Power Co. and Industrial Customers Phil. Sinter Corp.

Dagooc said he opposed the plan to sell the four government-owned power barges, which are in need of repairs, in May this year.

“If the government is serious in helping Mindanao, they should repair those power barges rather than have them privatized,” Dagooc said.

“It is not the electric cooperatives who are causing the power crisis in Mindanao, it is the wrong policy direction of the government,” he added. With Jigger Jerusalem

Firms vie for 38 coal prospects

By: Amy R. Remo
Philippine Daily Inquirer
12:01 am | Saturday, March 31st, 2012

The Department of Energy on Friday received 69 bids for contracts to explore and develop 38 highly prospective coal blocks across the country, considered an “overwhelming” number that proved investors’ unwavering confidence in the Philippines.
At the sidelines of the opening of bid offers Friday, Energy Undersecretary Jose M. Layug Jr. said the Philippine Energy Contracting Round 4 for coal attracted a lot of potential investors, of which about half were new players in the local coal industry.
Among the companies that submitted bids were Benguet Corp., Semirara Mining Corp., PNOC Exploration Corp., South Davao Development Co. Inc., SKI Mining and Empire Asia Mining Corp.
Layug said the DOE was targeting to award contracts within 150 days from the bid opening date yesterday, or by August 2012 at the latest. The coal blocks that had only one bidder will be processed faster than those that had six to eight bidders. For the coal blocks that did not have bidders, the DOE is set to re-offer these areas in future PECRs.
The offered coal blocks were in Quezon, Camarines Norte, Albay, Sorsogon, Masbate, Occidental Mindoro, Oriental Mindoro, Negros Occidental, Cebu, Bohol, Agusan del Norte, Misamis Oriental, Agusan del Sur, Surigao del Sur, Compostela Valley, Davao Oriental, Lanao del Sur, Lanao del Norte, South Cotabato, Sultan Kudarat, Sarangani, Zamboanga del Norte, and Zamboanga Sibugay.
Initially, the DOE offered 30 coal blocks when it launched the PECR 4 for coal in December last year. Should all the 30 contracts be awarded, the DOE is expecting initial investments to run up to P2.4 billion within a two-year exploration period.
The number of areas, however, were increased to 38 blocks in anticipation of a huge number of bidders.
Layug stressed the need for the country to harness its own coal resources given an increasing demand for the commodity, which now stood at about 12 million metric tons a year. Local production averaged 7 million MT, of which 3 million tons are exported to various Asian markets. Coal imports remained huge at 7 million tons a year, he added.
It is expected that over the next 20 years, coal will remain the major fuel for power generation and the government continues to encourage the private sector to explore and develop the country’s prospective coal blocks to find additional reserves that can be used to address growing local demand.
By harnessing its own resources, the government believes that it will be able to push for energy independence that will allow it to reduce its fuel imports as well as lessen its vulnerability to global price fluctuations.

Friday, March 30, 2012

Alsons’ increases profit to P456m

Friday, 30 March, 2012 Written by Jenniffer B. Austria

Alsons Consolidated Resources Inc., the holding company of the Alcantara family, said Friday net income in 2011 grew 20 percent to P456 million from P378 million a year ago on the strong performance of power and real estate businesses.

Alsons said in a disclosure to the stock exchange consolidated revenues grew 8 percent to P2.94 billion from P2.71 billion in 2010, with energy fees from power subsidiaries representing more than 70 percent of revenues. Property unit Lima Land Inc. accounted for the balance of 30 percent.

Alsons chairman and president Tomas Alcantara said the company’s earnings would be boosted this year by the projected acquisition of the former Iligan diesel power plant from Iligan City.

Iligan City has taken over the 102-megawatt diesel plant from National Power Corp. two years ago and awarded it the company’s subsidiary Mapalad Power Corp., after a public bidding in 2011.

Alcantara said once MPC takes over the idle plant, it would rehabilitate the plant and restore its capacity to 102 MW in six months, bringing additional power generating capacity to electricity-starved Mindanao island.

Alsons also plans to build 200-MW coal-fired power plants in Saranggani province and is currently in talks with Thailand’s Electricity Generating Co. and Japan’s Toyota Tsusho Corp. for a possible partnership.

The project, estimated to cost $280 million, is expected to commence commercial operations by June 2014. Alsons has already awarded the engineering, procurement and construction contract for the first of the two 100-MW plants to Korean firm Daelim Industrial Co.

Alsons also plans to build a 100-MW facility in Zamboanga.

(Published in the Manila Standard Today newspaper on /2012/March/31)

Semirara, Benguet lead 69 coal bidders

Friday, 30 March, 2012 Written by Lailany P. Gomez

The government Friday received 69 bids for 38 coal exploration contracts, Energy Undersecretary Jose Layug said.

Benguet Corp. and Semirara Mining Corp., the biggest domestic coal producer and exporter, were among the companies that offered to explore for coal, Layug said. The Philippines produced 7.6 million tons of coal and imported 10.96 million tons in 2011, according to data from the department.

“As we announced earlier at the initial pre-qualification process, we were overwhelmed with the interested parties. You are seeing new parties on the list. A lot of them we don’t know. It is a good indicator,” Layug told reporters at the sidelines of the opening of the bidding round.

He said the government pre-qualified some of the bidders and asked others to appeal their offers.

State-run Philippine National Oil Company-Exploration Corp. took part in the bidding for coal exploration and development.

The others in the list are Sultan Energy Phil. Corp., Bislig Venture Construction and Development Corp., SKI Mining Corp., SJH Coal Mining Development Corp., Philex Petroleum, Mineral Exploration & Geoanalysis Philippines Inc., One Asia, South China Resources Inc., Basic Energy Resources Corp., South Davao Development Corporation Inc. and Bentley Fairview Resources Corp.

(Published in the Manila Standard Today newspaper on /2012/March/31)

Region calls world event 8-hr outages

Friday, 30 March, 2012 Written by Manila Standard Today

MINDANAO’S leaders on Friday used the celebration of today’s Earth Hour to mock the administration’s inaction on their island’s acute power shortage, saying they had been turning out the lights not just for one ceremonial hour every year but for four to eight hours every day for the past two years.

“We’ve observed Earth Hour every day for the past two years,” Agham Rep. Angelo Palmones said.

“We now call it the Eight Hours. It is our way of life in Mindanao.”

Former senator Juan Miguel Zubiri took the same tack.

“As the world celebrates Earth Hour today to remind us to lessen our dependence on fossil fuels, we in Mindanao celebrate Earth Hour every day to the tune of four-hour brownouts every time,” said Zubiri, who first raised the alarm over the rolling blackouts gripping the island provinces daily.

Zubiri warned of massive job losses by April because of the “catastrophic” blackouts and urged the government to speed the development of renewable energy projects now pending with the Energy Department.

The former senator, who comes from Bukidnon, also said the government should look beyond building more coal-fired plants to solve the shortage.

“Building fossil-fueled power plants would defeat the very essence of having a cleaner world to reverse the impact of global warming,” Zubiri said.

The remarks from Mindanao’s leaders came a day after Senator Sergio Osmeña III said Mindanao had been “spoiled” by government subsidies over the last decade, and that the residents there would have to pay the price through higher power rates.

Osmeña also endorsed the construction of coal-fired plants and castigated the environmentalist group Greenpeace for opposing the projects.

But Zubiri said there were several requests for renewable energy projects in Mindanao pending with the Energy Department, including mini-hydro facilities in Surigao del Sur, Cotabato, Bukidnon and Davao.

The goethermal projects in Davao and parts of Region 9 and the wind projects for Surigao del Norte and Davao Oriental were also awaiting the Energy Department’s approval, Zubiri said.

He said the power that could be generated from those projects would be more than enough to supply the estimated deficit of 285 megawatts in Mindanao in 2014.

“The renewable energy law is in place. We appeal to government to promote and implement it,” Zubiri said.

Citing National Grid Corp. data, Zubiri said that, as of March 29, Mindanao had a power supply deficit of 187 megawatts or roughly 15 percent of peak system demand.

Zubiri said the power-intensive industries hurt by the recurring outages included food processing and canning; rice, corn and coconut milling; construction; metal die casting; and the manufacture of steel, chemicals, cement and paper.

The shopping malls and other commercial buildings that rely heavily on ventilation and cooling had also been hurt, he said.

“Agricultural plantations and fishing operations that depend on mechanization and cold-storage had likewise been dampened,” Zubiri said.

Even the petroleum and water industries had been hurt since they depended on electricity to drive their pumps.

On Friday, Maguindanao Rep. Simeon Datumanong said it was grossly unfair of Osmeña to blame the people of Mindanao for the problem, saying they were victims of government neglect.

“I do not know the basis of Senator Osmeña’s observation, but how can you blame Mindanaoans for the power problems that they cannot do anything to prevent?”

“Clearly the people of Mindanao were victims of Imperial Manila and the national legislators and policymakers’ myopic view and anti-people and anti-consumer mindset” that favored the big players in the energy industry, Datumanong said.

House Deputy Minority Leader and Zambales Rep. Milagros Magsaysay, a member of the House committee on energy, said Osmeña was clearly speaking out of turn, and out of his depth.

“I think that he is not the right person to make such comments,” Magsaysay said.

“The people of Mindanao should not be blamed for the scarcity of the power supply. It is the government’s obligation to ensure not only the people of Mindanao but of the whole country that they will have a stable power supply.”

Osmeña, the chairman of the Senate energy committee, was mired in a serious case of conflict of interest, Datumanong said, noting that the senator was married to a member of the Lopez clan, which had vast interests n the energy industry.

The Lopez family still owns 6 percent of Manila Electric Co., which is the distribution monopoly of Metro Manila and which supplies 70 percent of Luzon’s power requirements.

The Lopezes also acquired the Apo Geothermal Plant in Davao after Osmeña and his brother John helped craft the Electric Power Industry Reform Act years ago, and then raised electricity prices by 70 percent.

“Now who is spoiled or abused? Who is abusing the people of Mindanao? Datumanong said.

Palmones also denounced Osmeña’s statement blaming Mindanao for the industry being in the intensive care unit.

“Inside an ICU, there is no blaming but only the exchange of ideas and expertise,” Palmones said.

“Those who can’t help better stay away.” With Maricel Cruz

(Published in the Manila Standard Today newspaper on /2012/March/31)

DoE opens bids for coal contracting round

Business World Online
Posted on March 30, 2012 07:28:13 PM

THE ENERGY department has received 69 bids for the coal exploration areas it is offering under the 4th Philippine Energy Contracting Round.
The government said the number of bids show the increased interest in energy investments in the country.

“We are overwhelmed by the number of bids submitted for the areas we are offering. It shows that the round has attracted a lot of investors including new companies,” said Energy Undersecretary Jose M. Layug, Jr. in an interview at the sidelines of the bid opening Friday.

The government is offering 38 potential coal exploration areas to investors.

No bids were submitted for 10 which Mr. Layug said will be rebid in another contracting round.

Several bids have already been rejected by the department, but the firms may still file motions for reconsideration on Monday.

As of 5 p.m. in Friday, 42 bids had been accepted while 11 had been rejected.

Some of the companies that placed and had bids accepted were Semirara Mining Corp., Benguet Corp., Philippine National Oil Co.- Exploration Corp., SKI Mining Corp. and Superfine Mines and Minerals, Inc.

The Energy department expects investments of around P2.4 billion from the new coal contracts.

Areas being offered are: Panukulan, Burdeos and Polilio in Quezon; Calaug, Tagkawayan, and Guinayangan in Quezon; Tagkawayan, Quezon and Del Gallego, Camarines Norte; Rapu-rapu Island, Albay; Bacon, Prieto Diaz and Gubatcon, Sorsogon; Cataingan, Masbate; Calintaan, Rizal, San Jose, and Magsaysay, Occidental Mindoro; Bulalacao, Oriental Mindoro; Calatrava, Negros Occidental; Toledo, Minglanilla, and Cebu City, Cebu; Inabanga, Clarin and Sinagbayan, Bohol; Kitcharao, Agusan del Norte; Magsaysay, Misamis Oriental; Carmen, Butuan, Agusan del Norte; Sibagat and Bayugan, Agusan del Sur; Bislig, Lingig, Trento, Agusan del Sur; Nabunturan, Compostela Valley; Terragona, Davao Oriental; Togoloan II and Kapai, Lanao del Sur; Iligan City, Lanao del Norte; Lake Sebu, South Cotabato; Palimbing, Sultan Kudarat; and Maitum, Sarangani; Godod, Zamboanga del Norte; Kabasalan, Ipil, Naga, Kabasalan, Diplahan, Buug, Imelda, Malangas, and Alicia, Zamboanga Sibugay. -- Emilia Narni J. David

Gov't extends SPC Power contract for Naga plant

Business World Online
Posted on March 30, 2012 06:44:52 PM

SPC POWER Corp. has reportedly bagged the contract to continue running a thermal plant in Cebu in the interim while a state agency prepares a separate auction for a one-year operations deal.
The power firm disclosed on Friday that its proposal to operate and maintain the Naga power plant complex had been approved by the Power Sector Assets and Liabilities Management Corp. (PSALM), citing letters from the agency dated March 22 and 23.

PSALM is said to have approved SPC Power's final offer of P148.989 million on March 19 for a six-month operation and maintenance service contract [for the Naga power plant].

The offer comes after PSALM entered into a negotiated bid for the operations and maintenance of the facility composed of a 40.8-MW diesel power plant and a 105-MW thermal power plant.

The negotiated bid had to be undertaken after the bidding for a one year operations and service contract failed due to lack of bidders. The six-month contract gives PSALM more time "while a rebidding for the procurement of a one year operations and maintenance contract is being undertaken."

Earlier, lawmakers alleged the "right to top" the bidding by SPC Power Corp. is illegal.

The right to top emanated from a land lease agreement entered by PSALM, the National Power Corp. and SPC Power to build the 55-MW Naga land-based gas turbine located near the power plant complex. The agreement provided SPC Power the right to top biddings in properties in the vicinity of the gas turbine.

Shares of SPC Power closed at P4.80, up 50% from its previous close of P3.20 a piece. -- ENJD

Meralco customers to see 28 centavos Napocor increase in bills

Business World Online
Posted on March 30, 2012 06:36:47 PM

CUSTOMERS OF distribution utility Manila Electric Co. (Meralco) will not see the full impact of the price adjustments of National Power Corp. (Napocor) as it only sources a portion of its power from the agency, the company said in a statement on Friday.
The diluted increase will join the recovery for local franchise taxes paid by the distribution utility.

Meralco said its consumers will see an increase of P0.28 per kilowatt-hour (kWh) for residential customers instead of an P0.69/kWh hike in Luzon "since the distribution utility sources only a portion of its power requirements from Napocor."

"Meralco sources its power requirements from several generators, with Napocor being one of them. We at Meralco continuously try to come up with strategies to obtain the right mix of power from these different sources that will result in the most reliable and reasonably priced power for our customers," said Lawrence S. Fernandez, Meralco Head of Utility Economics in the statement.

On Wednesday, the Energy Regulatory Commission (ERC) approved an increase of P0.69/kWh for Luzon based on recovery for generation and foreign exchange adjustments.

The ERC also approved the recovery of Meralco's local franchise tax that it paid to different cities and provinces.

The utility was allowed by the ERC to raise rates by up to a little over four centavos in order to recover P2.87 billion in local franchise taxes paid from 1993-2004.

Electricity bills will go up in the provinces of Bulacan, Batangas, Cavite, Laguna, Rizal and the cities of San Jose del Monte, Batangas, San Pablo, Tagaytay, Lucena, Mandaluyong, Marikina, Quezon, Caloocan, Pasay, Las Piñas, Manila and Pasig.

The company said it will also file for a petition "for the verification of its Maximum Average Price for regulatory year 2013."

The verification will determine if previously approved rates are still valid.

Meralco ended 2011 with a 22.5% growth in its core net income to P14.9 billion from P12.2 billion.

Its reported net income grew 36.6% to P13.2 billion in 2011 from P9.7 billion.

Mediaquest Holdings, Inc., a unit of the Beneficial Trust Fund of Meralco's sister firm Philippine Long Distance Telephone Co., has a minority stake in BusinessWorld.

Shares of Meralco closed at P262, up 1.95% from its previous close of P257 a piece. -- Emilia Narni J. David

Palace to finalize contingency plan at Davao power summit

Business World Online
Posted on March 30, 2012 06:35:19 PM

MALACAÑANG is banking on a power summit in Davao in April to finalize the administration’s contingency plan to ease the power crisis in Mindanao, warning against local government officials taking an “obstructionist” stance as a solution will require the full cooperation of all stakeholders. Presidential Spokesperson Edwin Lacierda said that there are already recommended solutions at the national government level, but that these will be rendered moot if met with resistance at the local government level.
To better convince the local government units (LGUs) of Mindanao, Interior and Local Secretary Jesse M. Robredo will be at the Davao summit, which is yet to be scheduled.

“Secretary Robredo will also be making sure that the local government units are also on board. It’s a situation in Mindanao where it requires the full cooperation of everyone, it will not help [for] one local official to be obstructionist in character,” Mr. Lacierda said at a Palace briefing on Friday.

“That’s the reason why we are urging all the stakeholders in Mindanao to cooperate because there is a solution -- it takes the cooperation not only of the people but also the local government officials in Mindanao,” he added.

He explained that Energy chief Jose Rene D. Almendras and Mindanao Development Authority administrator Luwalhati R. Antonino have already submitted to President Benigno S.C. Aquino III their proposed solutions, elements of which have been discussed in various media fora by the proponents.

“They have submitted their proposed solutions which will be reviewed by the President,” Mr. Lacierda said.

These solutions will be presented to the people of Mindanao at the summit, he noted, which is scheduled tentatively after the President returns from his Cambodia trip this April 3-4. -- Johanna D. Poblete

Hawaii county to adopt Leyte geothermal technology

Friday, March 30, 2012

OFFICIALS of Hawaii county of Hawaii, USA are strengthening their sisterhood ties with Ormoc City in its effort to maximize their island’s geothermal energy potential, adopting the technologies in Leyte.

In a visit this week, Hawaii county Mayor William Kenoi said the development in Leyte is also possible in their county as they move to use a 100-percent renewable energy.

“We recognize the growing uncertainty surrounding our energy needs in both our countries. We have come to learn from the Philippines how to develop, expand, rely on our own natural assets and energy resources such as geothermal,” Kenoi told reporters.

The official said he was impressed with the facilities straddling the 107,625 hectares Leyte Geothermal Production Field in Ormoc City that even a third of its current capacity can supply the demand of their county’s entire island.

“We have about 30 megawatts (MW) of geothermal power and we are leading in Hawaii in that amount of energy. We have come to Ormoc and see 700 MW with our very own eyes. We saw one power plant producing more than 200 MW and that will bring power to the entire island of Hawaii,” Kenoi said.

“We know it is possible and once we know it’s possible and the potential exist and then the reality and implementation of that possibility is right around the corner for us,” he added.

Randy Kurohara, director of Hawaii county research and development, said they are very concerned about their energy security with the rising cost of fuel and their location “miles away” from mainland.

He said power produced from renewable energy accounts only 35 percent of the total demand and they are mainly dependent on fossil fuel. The demand of the entire island is 200 MW and they only have 30 MW coming from geothermal. Other sources are wind, solar, and hydro.

“We really believe that we have so much geothermal in our island and we should develop that further. We are optimistic that the reality will be brought forth in a very near future,” Kurohara added.

A report estimated that Hawaii Island’s geothermal resources have the capacity to produce between 500 MW and 700 MW of electrical power.

Imported oil has been the primary fuel not only for transportation but also for generating electricity in the Hawaiian Islands.

The Hawaiian delegation was composed of city officials and energy experts tasked to coordinate with the Energy Development Corporation on the project.

Ormoc City Councilor Jose Alfaro Jr., chair of the committee on energy and sisterhood, said top Ormoc officials also visited Hawaii last year to forge sisterhood agreements.

“Aside from energy, the sisterhood is also centered on exchange of ideas on education and cultural practices,” Alfaro said.

Sister city relationships are agreements that bind regions together in cultural and economic cooperation. The cities often have similar histories and similar economic drivers.

Hawaii county is a county located in the US state of Hawaii in the Hawaiian Island. The county’s land area comprises 62.7 percent of the state’s land area. It is the highest percentage by any county in the United States. (Leyte Samar Daily Express)

Misamis, Oro officials favor granting Aquino special powers

By Annabelle L. Ricalde and Michael Andrew W. Yu
Friday, March 30, 2012

CAGAYAN DE ORO -- Government officials from Misamis Oriental and Cagayan de Oro back the proposed giving of emergency powers to President Aquino III to address the worsening power shortage in Mindanao.

Misamis Oriental Representative Yevgeny Emano (2nd district) said since the impact of the problem is already felt by the people in Mindanao, an immediate remedy should also be needed if the long-term solution is not yet available.

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“If this cannot be addressed the soonest, our economy would surely be affected because who among the investors would want to put in their businesses in Mindanao, especially in Misamis Oriental, if there is not enough supply of power?” Emano said in a radio interview.

Cagayan de Oro Representative Benjamin Benaldo (1st district) also agreed on the idea of giving Aquino emergency powers.

Benaldo said he is worried that the power shortage might lead to the decline of economic activity and would result in losses of jobs and livelihood.

At the same time, Benaldo emphasized that the emergency powers extended to the President will be defined within the framework of extreme circumstances and limitations to ensure that there will be no repetition of the mistakes during the time of former President Fidel Ramos that “instead of finding solution, people were made to suffer more.”

Both Emano and Benaldo expressed confidence that the emergency powers, once given to the President, will not be abused since Congress will also be creating an oversight committee to monitor if the guidelines are properly followed.

However, City Councilor Edgar Cabanlas said the emergency powers may only aggravate the problem as what happened during the time of Ramos when the shortage was taken advantage by private power producers in connivance with government officials who came up with difficult “sweetheart contracts” that led to high power rates.

In 1992, the country was plunged into a severe power crisis, which led then President Ramos to seek emergency powers from Congress to deal with the problem.

Forty independent power producers signed contracts with the take or pay provisions with the government, which only spawned an oversupply of power plants and forced consumers to shoulder energy costs that they did not use.

“I don’t agree with the emergency power because I believe this is only an artificial shortage and in the end, it would still be the consumers who will suffer,” Cabanlas told Sun.Star Cagayan de Oro.

According to him, the government should rehabilitate and expand the Agus hydropower plants and develop other renewable energy as long-term solution.

Earlier, Senator Antonio Trillanes IV filed a bill that seeks to grant emergency powers to Aquino in light of the energy crisis in Mindanao.

Related to this, Senator Francis Escudero stressed that Aquino should be granted standby power in case of extraordinary situations that he can exercise at his own discretion without having to run to Congress every now and then and wait for its imprimatur.

“This power crisis in Mindanao is one of those extraordinary circumstances that call for extraordinary power,” Escudero said.

He said the standby power should only be temporary meant to provide immediate remedies in cases of national emergencies.

Escudero believed that the emergency powers can address the valid issue on pricing as the President can impose a price cap in case of market failure, fears of monopoly and skyrocketing power prices that grip the residents of Mindanao.

Meanwhile, the Provincial Government of Misamis Oriental also expressed its support to Trillanes’s bill.

In a statement, Governor Oscar S. Moreno said he expressed genuine support to the move to address the critical power situation that affects Mindanao.

“I welcome the Senate Bill with the hope that our representatives from Mindanao will contribute towards attaining the same objective. I, however, hope that our energy experts would take a more potent role in ensuring judiciousness,” Moreno said.

Under Senate Bill 3167, or the so-called the Electric Power Crisis Act of 2012, Trillanes proposes to allow the President to enter into negotiated contracts for the construction, repair, rehabilitation, improvement or maintenance of power plants, projects and facilities, subject to some safeguard provisions.

“Out of abundance of caution, however, this measure expressly prohibits the government from granting sovereign guarantee for the payment of obligations incurred by the independent power producers (IPPs),” Trillanes said in a television news article.

Reportedly, the emergency powers will only take for one year.

However, Aquino said he did not need emergency powers “so far” to deal with the crisis in Mindanao.

“At this time, I am not sure whether emergency powers are what are needed,” Aquino said. (Sun.Star Cagayan de Oro/Sunnex)

Published in the Sun.Star Cagayan de Oro newspaper on March 31, 2012.