DAVAO City Councilor Pilar Braga opposed the privatization of the Agus-Pulangi power assets, saying it would not benefit consumers in Mindanao and the island's economy.
In a privilege speech during Tuesday's regular session, Braga called on the Power Sector Assets and Liabilities Management Corporation (Psalm) not to proceed with the sale of Agus-Pulangi.
He also asked the City Council to pass a resolution asking Congress to immediately undertake investigation in aid of legislation on amending the Electric Power Industry Reform Act (Epira), particularly Section 47 of the law to prevent the privatization of Agus-Pulangi.
"I also urge (the City Council) to pass a resolution opposing the privatization of the National Power Corporation's (Napocor) Agus-Pulangi hydro-power complex. I firmly believe that government-owned power resources that form part of our collective patrimony must be secured for the interest of all Filipinos," Braga said.
Braga, who chairs the City Council committee on energy, delivered the speech as a corresponding action to the stand of the Alliance of Power Consumers of Mindanao, to which she is member.
"The people of this country were made to expect that with the passage of RA (Republic Act) 9136 or the (Epira) in 2001, there will be healthy competition among energy players; that the operational efficiencies of power companies will improve; that there will be a reliable and constant supply of electricity; that blackouts and power outages will be just a thing of the past; and most of all, the high power rates in the country will be reduced for the benefit of end-users and consumers," he said.
She said the promises of lower power rates for consumers through the Epira have remained a promise nine years after the law was passed.
The Epira law was enacted after five years of debates in Congress "amid the assurances of so-called experts and the Asian Development Bank that electricity prices would go down and that competition would flourish," Braga said.
To facilitate the privatization mandated by Epira, Psalm, which was tasked to auction off and sell the generation and transmission assets of Napocor, was created.
Private corporations were just too eager to grab what Braga described as the "nation's crown jewel" -- the Napocor. But instead of making competition flourish, what followed was a cartel.
"What we have now is the emergence of private and powerful monopolies and cartels and increasing electricity tariffs [that] further bleed our workers and consumers. Electricity rates in Luzon and in the Visayas have gone up after Napocor properties were auctioned to private interests," Braga said.
She recalled that power shortages occurred during summer this year, "which battered the country, affecting businesses and livelihoods."
"The power players have failed to set up additional plant capacity and behaves like a cartel waiting as El Nino and plant shutdowns create an energy gap that will justify an energy policy which would allow higher tariffs to attract new investments," she said.
Braga said Psalm, so far, sold 12 hydro power plants to private investors and a total of 91.73 percent of its generating plants.
"The Agus-Pulangi hydro-power complex is next to be sold in 2011, (as indicated in the Epira) ten years after said law's signing," she said.
Braga also said that Agus-Pilangi is so critical to the well-being of the people of Mindanao because its hydro-power complexes, which were constructed during the Marcos administration, are composed of seven power plants.
"Six hydro-power generators are located along the Agus River in Lanao provinces and one on Pulangi River in Bukidnon and North Cotabato. The power complex supplies 55.38 percent of the power needs of Mindanao," she said.
Braga said the power complex is an earning government enterprise.
"From January to July 2009, it generated a total of P5.3 billion in gross revenues at a higher average Rate-of-Return-on-Rate-Base of 34 percent. The complex is also ISO certified, awarded for its excellent performance and managed by technically competent and dedicated officers and staff," she said.
Power rates in Mindanao are relatively lower compared to Luzon and Visayas because of the Agus-Pulangi hydro-power plants that use the natural water resources of Lake Lanao, Braga said.
She added the average generation charge for Luzon is P4.36 kilowatt-hour (kwh) and P3.72 kwh for Visayas, while that of Mindanao is lower at P2.81 kwh.
"The retail rate for Meralco's residential customers is around P13.46 kwh, while in Cebu's Visayan Electric Co's., consumers have to shell out at least P7.92 per kwh of electric consumption. In Mindanao, the generation charge in is only P2.81 kwh. In Iligan City for instance, the retail rate of electricity is only around P7.60 and in Davao City, P7.23. Consumers and business owners in Mindanao are still enjoying lower electric tariffs because the Agus-Pulangi power generators are using cheaper hydro-power and more strategically it still in the hands of the government," Braga said.
She said transferring 55.38 percent of Mindanao's power supply to private family corporations and a few other conglomerates would pave the way for price manipulation to the detriment of the consumers.
"The people of Mindanao will become like the consumers of Luzon and the Visayas - angry, helpless, and clenching their teeth in the face of brownouts and power prices hitting the roof," she said. (Jade C. Zaldivar)
Published in the Sun.Star Davao newspaper on September 23, 2010.
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