Price to pay for power

COMMONSENSE By Marichu A. Villanueva (The Philippine Star) Updated March 28, 2012 12:00 AM


Administration allies of President Benigno Simeon Aquino III, or P-Noy for short, have circled the wagons on the looming power shortage problem in Mindanao. Before this breaks into a full-blown power crisis during P-Noy’s watch, administration allies in the 15th Congress have mobilized ranks to gather support for a possible grant not just of emergency powers but also “standby” authority to enable the President to immediately address the electricity shortage in Mindanao.


Senator Francis “Chiz” Escudero expressed support for the House initiative to grant President Aquino emergency powers to prevent the recurrence of long hours of literal darkness in the country.


The House initiative was spearheaded by pro-administration Eastern Samar Rep. Ben Evardone who suggested that Congress hold special session to tackle the problem.


Both chambers of Congress adjourned last week for their Holy Week break and will resume session on May 7. Since special sessions would be short, Escudero suggested that Congress should just amend the existing Electric Power Industry Reform Act (EPIRA) to grant standby authority to P-Noy. The proposed emergency powers would seek to cut bureaucratic red tape in the approval of new power plant projects.


The proposed grant of emergency powers will obviously be patterned after those granted to former President Fidel Ramos in 1992 when Luzon suffered eight to twelve-hour blackouts. When Ramos assumed office, he had to deal with the debilitating Luzon-wide blackouts he inherited from the administration of P-Noy’s late mother, former President Corazon “Cory” Aquino.


For one year, the emergency powers granted to Ramos enabled the government to fast-track the approval of projects that included negotiated bidding. Unfortunately, like any other emergency remedial measures, it produced serious side effects like the hated “take or pay” provisions as incentives to investors as guarantee of returns (profit) of their power projects.


This gave birth to the independent power producers (IPPs) who were allowed by law to charge consumers for even unused electricity. We were forced to bite the bullet, so to speak, as the only quick way out of those dark days.


Installation of new base-load power plants takes two to three years of construction before actual electricity goes on stream. According to officials of the Department of Energy (DOE) headed by Secretary Rene Almendras, there are a number of power projects in Mindanao that have been in the pipeline. However, four such projects in Mindanao are coal-fired plants stalled by environment issues raised by host communities and local government officials.


Sadly, the people of Mindanao would have no choice. They have to pay the higher cost for un-interrupted electric service. Diesel-fed power barges are being deployed in Mindanao as the most immediate measure for now to reduce, if not prevent, rotating blackouts.


My column last Monday about recurring long hours of blackouts in Mindanao has elicited very interesting comments from our Star readers online. The comments reflected the various perspectives on the problem of creeping power supply crisis in Mindanao. And worthy of these comments are the proposed solutions on how to address this problem in more ways than one.


From micorenz:


“The root cause of the power crisis in Mindanao are only two: lack of political stability and poverty. Why is this so? Because to create an electricity grid requires a producer and a consumer. The producers are investors who put in the infrastructure (power plant, distribution line, transformer substation, etc).. But since Mindanao has been traditionally and largely viewed as a place where terrorists and rebels thrive, it has been difficult for investors to get assurance of the safety of their investments and the people manning them. That’s the reason why until now, despite the raw potential, no serious investors have embarked on a large-scale infrastructure development for power generation in Mindanao. Local politics and lack of peace and order destroy investor confidence and poverty. Yes, poverty. Even if there is ample power supply but people have no stable jobs and financial resources from which to get the money to pay their electric bills, all power investments will fail. And that’s the reason why electric cooperatives incurred debt. The consumers are not paying. Government should solve these twin problems and we will finally begin to see the proverbial light at the end of the tunnel.”


From drjjr2001:


“There may be many ‘political’ solutions to the electrical problem, and that is an issue for the government to deal with. But how can the needed electricity be produced in the shortest period of time and with the least environmental impact? The answer is ‘solar power.’ At the present time there is a glut of solar panels on the market and solar has never been as inexpensive. Also, a 60-megawatt solar farm can be built in about 9 months and can be expanded as needed. Many solar farms (power plants) can be built around populated areas and they would provide the needed electricity during ‘times of peak demand,’ when commercial businesses are operating and A/C is being utilized in homes. Coal is dirty. You need to complete the entire plant before you can start producing electricity. And the price of coal will never get cheaper. A solar plant can start producing electricity as soon as the first inverter is powered and can be expanded as demand increases. It is clean and the panels last 25 years or longer.”


In a speech yesterday at the Philippines Investment Forum organized by Euromoney, President Aquino boldly predicted the country could meet the projected increase in demand for electricity sooner than expected through the government’s national renewable energy (RE) program. The Chief Executive noted, there is currently an installed capacity of 5,000 megawatts (MW).


On the other hand, he cited, there are approved service contracts for 7,067 MW and pending applications for another 3,771 MW. There is a rough estimate of projected demand of 15,400 MW of electricity by 2030 in the Philippines. We could only share P-Noy’s hopes that the projected increase in generation capacity will help bring down the price of power that we pay here.