Manila Bulletin
By Myrna M. Velasco
Published: May 26, 2013
As the Mindanao power crisis lingers, it has been turning into a story-telling of policies, politics, economic consequences, people’s sufferings and lessons learned from the “dark days.”
And lies and conspiracies – maybe, or maybe not!
Privatization Dilemmas
Here are the well-known facts. From an über-vertically integrated power utility, the National Power Corporation (NPC) went through a restructuring process upon the passage of the Electric Power Industry Reform Act (EPIRA) in 2001.
Yet in the divestment of state-run power assets, the hydropower complexes of Agus and Pulangui in Mindanao have been exempted for sometime – there had been a 10-year window provided in the law (until year 2011) before they can be offered to private sector takers.
The cut-off period to privatization may have already lapsed, but the opposition to the hydro assets’ privatization still reverberates in the region.
Mindanao’s economy and population have been growing in the past years – and these should have been underpinned by capacity additions in the grid’s power supply. Regrettably though, no new power investments had been made since 2007, and naturally, it ended in a supply deficit that is now triggering the distressing 4-8 hours of rotating brownouts in many areas in the grid.
Investors were fidgety pouring in fresh capital because it had been very difficult for them to match the “below-market” grid rate set for Mindanao, which by design, is also PSALM’s benchmark price for the capacity it has been selling from its generating assets, mainly the Agus-Pulangui plants.
The investors’ chorus has always been for a “situation to be created to encourage more private investments in the power generation industry in Mindanao by creating an environment that will allow them to reflect the true cost of producing power.”
It did not also help that the ‘dominant hydro source of power’ for Mindanao is recurrently rendered unreliable during summer months – and worse, at longer dry spells with the strike of cyclical El Niño phenomenon.
Conspiracy?
Fortuitously, I have seen the crisis not only from a media’s viewpoint, but I technically became part of the solution-scouring process when the United States Agency for International Development (USAID) and the Mindanao Development Authority (MinDA) tapped me in recent months to help explain to my colleagues and other stakeholders in the region how the media must comprehensively understand an industry as “complex and technically-replete” as energy. Those speaking engagements gave me the chance to interact with stakeholders in various areas like Cagayan de Oro, Iligan, Bukidnon, Lanao del Sur, and even to those in Davao and as far as Butuan City, Siargao and the Surigao provinces.
What have I known so far? The common thread of allegations sounded off was that: “The Mindanao crisis had been a conspiracy between the government and the private sector so the people in Mindanao will accept privatization of the Agus and Pulangui plants.” The supply deficiency, they suspect, was just drawn from the precept of an “artificial crisis.”
So the next question was: has there been technical validation or study that will prove such conspiracy theory? The answer: None! And who are the ones saying it? The politicians. If there were in fact collusive acts, why have they escaped the regulators’ watchful eye?
On such assertions, these are the sticking points. If the power shortage is contrived, no investor (in his right mind) will stake billions of pesos for power investments knowing that he will just end up incurring huge losses in the future.
And the more pressing question: why will the government or the NPC-Power Sector Assets and Liabilities Management Corporation (PSALM) agree to such conspiracy? The math on NPC-PSALM’s side alone is disturbing – say, for just a curtailment of 100 megawatts at the grid rate of P3.00 per kWh – that will entail P216 million losses a month or roughly P2.6- billion annually. Certainly, that would be a very expensive way to promote privatization.
The ultimate test for responsible and credible media then is to validate the facts from the ground and analyze the issues that surround the crisis – rather than regurgitate such allegations from politicians or any non-technical party.
One mentor imparted this guiding thought: “If you believe everything that a source will tell you, I will sell you a palace!” Realistically, in the complex world of electricity systems, there are no engineering and technological shortcuts.
Losses
The strike of the scorching summer months lowered water elevation at the hydro facilities, hence, worsening the brownout conditions. What transpired next was a dismal picture with businesses in Mindanao’s southern corridor already complaining of swelling opportunity losses.
Mr. Rey Billena, vice president of the General Santos Chamber of Commerce noted that “businesses in southern Mindanao could lose as much as P300 million this summer from unrealized sales and higher costs due to the daily power outages.”
Worst-hit, he said, are the tuna canning factories which are considerably the “business strength” of the Socsksargen region. Just for these enterprises to survive the crisis, they have been incurring at least P500,000 in additional costs – mainly for back-up power and payments to workers even if they are not going to work because of the brownout’s alarming frequencies. “The losses amounted to a total of P8.0 million to P10 million per cannery per month. And there are seven canning factories here,” Mr. Billena said.
The fate of other businesses are similarly not promising, with Mr. Billena indicating that many of them are already contemplating to “temporarily close shop” until the brownout conditions ease. This, he explained, will serve as their “coping mechanism” to avoid total bankruptcy. (To be continued) source
No comments:
Post a Comment