Power utilities should toe the line — Zarate

Published January 5, 2020, 3:24 PM By Ellson Quismorio 

https://news.mb.com.ph/2020/01/05/power-utilities-should-toe-the-line-zarate/

Bayan Muna Party-List Rep. Carlos Zarate has urged President Duterte to compel abusive players in the power sector to toe the line, just like the water concessionaires of Metro Manila.

Zarate claimed that onerous contracts – similar to the agreements signed by huge water companies with the government – are also being pushed by big investors in the power generation and distribution business.

“President Duterte should be as tough on these power oligarchs as he was to the distributors of water in Metro Manila,” said Congressman Zarate, a Senior Deputy Minority Leader and one of the leaders of the Makabayan bloc in the House of Representatives.

For several years now, Congressman Zarate has been warning the public about the disadvantageous nature of some proposed power supply agreements (PSAs) for the construction of several coal-fired power plants.

“They are also pushing for onerous contracts that will no doubt burden consumers,” added Zarate.

These power contracts are still pending before the Energy Regulatory Commission (ERC).

Zarate said President Duterte should also look into the power industry where “monopolies are also holding consumers hostage.”

“The constant threat of thinning power supply and brown outs in exchange for higher power rates or more onerous power supply agreements has been the bane of consumers for decades now,” Zarate said, reiterating an appeal to Malacañang in April 2019. That month, the Luzon grid was placed under red alert status several times, leading to rotating brownouts in key areas.

“We agree with Department of Energy (DOE) Secretary Alfonso Cusi, that the yellow and red alert warnings are a signal that de-mand has caught up with the existing supply and that there is a need to start building capacity, but we need to have a comprehensive nationalized power plan to achieve this.

“At the minimum the Electric Power Industry Reform Act (EPIRA) must be reviewed and drastically amended, or, at best even repealed out right so that it would be the government that would make the energy plan to be implemented and not just rely on the whim and greed of power oligarchs,” said the Davao-based solon.

In 2013, the ERC and DOE found basis to conclude that energy players colluded to jack up electricity prices in the spot market in the midst of simultaneous power plant shutdowns.

Zarate has long argued that these power plant outages and “tripping” are orchestrated by plant operators in order to create the illusion of a power shortage.

Zarate and most recently, Bayan Muna Chairman Neri Colmenares has claimed that this “phantom shortage” is meant to scare the public into accepting higher electricity rates that would result from the operation of wasteful power plants, like the 1,200-megawatt (MW) Atimonan One.

According to Bayan Muna, Atimonan One’s reported P15 billion interest on loans as well as the increased cost on imported equipment would translate to a P1.80 per kilowatt hour (kWh) increase in capacity cost. This would raise the plant’s power rate to P7.46 per kwh.

“This would be exorbitant compared to other players who offer electricity for as low as P2.95 per kwh,” Zarate pointed out. Atimonan One is among the questioned PSAs before ERC.

Zarate said a true nationalized comprehensive power plan in which the government would spearhead constuction of its own power plants would not only ensure low power rates “but would also guard against power oligarchs again trying to push down onerous deals at the expense of the people.”