Osmeña, industry stakeholders to discuss PHL’s power concerns on Wednesday

BUSINESS MIRROR

MONDAY, 11 JULY 2011 19:28 JONATHAN L. MAYUGA

CONCERNS over the critical electricity supply situation in the country, particularly in Mindanao, and the declining competitiveness of the Philippines because of high power costs will be the agenda of a  “no-holds barred” forum with Sen. Sergio Osmeña III, the power sector and private industry leaders as discussants.

At the forum, which will be held at the Club Filipino in Greenhills, Osmeña is expected to express his concern that the National Energy Renewable Program, the Philippines’ road map for increasing its dependence on renewable energy sources, like solar, biomass and hydro, would increase the burden shouldered by consumers and industries by as much as P8 billion a year for three years, mainly due to the high cost of solar energy at P17.95 per kilowatt-hour (kWh) to be shouldered equally by all users under the feed-in tariff system adopted to encourage a shift to renewable-energy sources.

Local economists have already bewailed the current high electricity costs in the Philippines as the major contributor to the rapid decline in the country’s competitiveness in the world market, with neighbors, like Vietnam, Malaysia and Thailand, offering rates as low as 5 to 7 US cents per kWh against the Philippines’ 23 US cents.

Osmeña, chairman of the Joint Congressional Power Commission, is expected to tackle concerns centered on the investment climate in the Philippines under President Aquino and the rosy economic targets set by the government as part of a strategy to pull out from deep poverty millions of Filipinos could turn bleak because of high power costs and a tight electricity supply, particularly in Mindanao, as projected by the Department of Energy (DOE).

Energy Secretary Jose Rene Almendras said the government is also concerned over the tight electricity supply situation in Mindanao, notably the reserve energy margin which remained below the targeted 21 percent. He warned this could plunge the island into daily brownouts again if a power plant or unit breaks down.

Adding to the private sector’s energy woes are the unreliability of power supply, especially in Mindanao which is emerging as the country’s growth dynamo, with more than a century-old Muslim insurgency expected to be settled with a final peace agreement between the Philippine government and main Muslim rebel group Moro Islamic Liberation Front in three years’ time.

Mindanao suffered daily rotating brownouts for almost half a year before the 2010 elections as the dry spell caused by El Niño brought down water levels and reduced drastically the generating capacity of the island’s hydropower plants. Electricity demand in the South increased dramatically in the last three years as its economy rose three-fold compared with the national growth rate, with new industries that included new business-process outsourcing centers in the island’s regional centers sprouting and triggering higher consumer demand.

While major investors, like the Alcantara Group and Conal Power Holdings, Aboitiz Power Corp.,  Filinvest Development Corp.,  and even Sagitarrius Mines Inc., are putting up new power plants that would add almost 1,000 megawatts of generating capacity in Mindanao, the DOE projects that electricity demand would still overtake supply by 2014.

(Jonathan Mayuga)