Mindanao co-ops to oppose sale of STEAG

Business World Online
Posted on August 23, 2015 05:53:00 PM

CAGAYAN DE ORO CITY -- Thirty-four electric cooperatives in Mindanao have banded together to lobby the government with the intent of blocking the auction of STEAG State Power, Inc.’s (SPI) coal-fired energy output to independent power producers (IPPs).

The Association of Mindanao Rural Electric Cooperatives (Amreco) launched here a campaign last week to gather 200,000 signatures from consumers of its member cooperatives by November in a bid to persuade the government to maintain the direct delivery of the SPI’s power to the Mindanao grid.

Amreco Executive Director Clint Django G. Pacana said the group is confident of mustering enough support for the petition from their customer base of about five million on the southern island.

“The electric utilities, including their member cooperatives, would be forced to increase their electricity rates if the plan pushes through to recoup the generation costs being imposed on them by the winning IPP,” Mr. Pacana said.

Cagayan de Oro Chamber and Industry Foundation, Inc. President Cerael C. Donggay, who attended the Amreco petition launch, expressed support for the cooperative group.

Mr. Donggay said any sale of energy assets that would result in an increase in electricity rates is illegal, citing Section 4 Rule 23 of the law governing the power industry.

Republic Act 9136 or the Electric Power Industry Reform Act (EPIRA) of 2001 provides for the privatization of the government’s power assets and established the wholesale electricity spot market, a trading platform for electricity supply that is intended to make rates competitive through IPPs that offer prices every hour.

Proposed amendments to the EPIRA are currently being discussed by Congress. In June, a panel of the House of Representatives approved the exemption from privatization of the Agus and Pulangi hydropower complexes, the two main energy sources of Mindanao.

SPI has a total capacity of 210 megawatts (MW), of which 200 MW is up for auction.

A Sept. 23 deadline has been set for prospective IPPs to submit bids. -- Mark D. Francisco source