It’s all about perception

by Joey Mirasol - Nov 17, 2015
http://www.palawantimes.com/its-all-about-perception/

THERE have again been many issues raised against Paleco recently, particularly with the spate of intermittent brownouts plaguing us once again, some lasting for as short as 5 minutes or as long as an hour, particularly in the area of the GMA circuit, which includes San Manuel and San Pedro on the east side of the highway, fortuitously where GM Ric Zambales lives. What an irritant it can be when we are hit with an unannounced brownout while trying to complete a report on our computers, or in the middle of the rice cooker’s cycle, or while taking a shower, or when least expected… We had the opportunity to sit down with GM Ric to ask him the questions so many are asking, and I think our Editor will be publishing our interview in this week’s Times issue.

We learned from GM Ric that the usual cause of these brownouts is the failure of our independent power producers to maintain a surplus production to act as a buffer in case one of their generators breaks down.

When this happens, the immediate solution is to shut down the circuit with the least load, and most often, it is the Iwahig and the GMA circuits, which are shut down until the IPP is able to start up another generator to meet the demand. If they don’t do this, the entire grid will do a domino effect and a total blackout will ensue. As is often the case, it is DMCI that is at fault, and since their gensets are of only 1MW capacity, the low-demand circuits are the only ones affected; while if a PPGI or Delta-P unit breaks down, which are of 3MW and 4MW capacity, a wider area brownout will result. Why the IPPs don’t provide at least a 2MW excess supply over demand to serve as a buffer is something that Paleco must keep close tabs on, if only to ensure continuous service even if a genset overheats or decides to stop working. But as we kept saying before, there is no lack of power to meet present demand in Palawan, the problem is the operational efficiency and the ability of the IPPs to comply with their contractual and moral obligations.

We asked about the rumored “supplemental” PSA that DMCI is asking for and that the Paleco Board is prepared to give. The general perception of the public is that DMCI is being given a new contract, which is unacceptable to our consumers considering that DMCI failed to perform on their existing contract. As it turns out, the existing contract covers power generated by a combination of coal and diesel as a fuel, but DMCI now wants to introduce bunker-fueled generators because the likelihood of the coal plant becoming a reality is now zilch. Apparently, DMCI wants to bring their cost from the present P12+ per kwh using diesel down to P9+ using bunker, and they want this reflected on their PSA. Why the Paleco Board is calling this development a “supplement” instead of an “amendment” or “addendum” is beyond me, but as far as I’m concerned it is purely semantics; call it whatever you want, as long as it does not change the overall PSA, like extending their term or lessening the penalties for non-performance. The issue of DMCI’s non-performance and resultant penalties still has to be resolved, together with the rescission of their PSA, yet the Board is prepared to work with them, if only to arrive at a lesser cost which will supposedly benefit us consumers.

If the intent is to gain the advantage of lower costs for Paleco, why not entertain Delta-P’s unsolicited offer of bunker-fueled power at P8.22 per kwh instead of DMCI’s P9+? Doesn’t make sense, right? But GM Ric’s defense is that Delta-P’s offer is on a Take-or-Pay basis, not Take and Pay, or in other words, if you don’t use what Delta-P is prepared to supply you will still have to pay for it. But maybe this is the answer to GM Ric’s fear that if they go strict on DMCI and terminate them for breach of contract, they will be left with a supply shortage. So why not give Delta-P a PSA for 25MW at P8.22 to replace DMCI who is billing now at P12+ and can only go down to P9+ with that “supplemental” PSA? Paleco knows what the demand is and will be, they can craft that Take or Pay PSA to perhaps 15MW or 20MW, and get the balance of the demand from PPGI. Napocor is on standby, has been since Sec Petilla got in on the act when DMCI was all messed up several months ago, and is prepared to supply the shortfall until the time that the hydro plant of Langogan Power comes on line. Even without DMCI, the consumers can tighten their belts and continue to suffer a little bit more, after all the practice done because of DMCI’s service failures.

I also asked why DMCI is billing Paleco at P12+ when their bid which resulted in the award of their PSA was to supply at only P9+. At the time we began asking this question, even the then members of the Board could not answer, neither were they given copies of the PSA. It turns out that the final PSA signed included a collatilla that allowed DMCI to bill at P12+ while the coal plant was not yet operating. Why was this kept secret from the majority of the Board and from the owner-members? Who signed this PSA on behalf of Paleco, Sarra and Antonio? Shouldn’t they be made to answer for pulling-the-wool-over-the-members’-eyes? Just because Sarra was “resigned” and Antonio was voted out doesn’t absolve them from their sins against the members; even Sarra’s “retirement benefit” package is questionable as she was unqualified to be GM to begin with; she should in decency reimburse Paleco for all the salaries and benefits she received while she acted as GM fraudulently. If the new Board wants to do their job and fulfill their obligation to the members they represent, they should initiate legal proceedings against Sarra and recover all the monies Paleco spent on Sarra, and distribute these as dividends to the member-owners, which sum could amount to approximately P5M.

Another nagging issue is the qualification to be a board member of Director Endriga. Some have said he was not yet a graduate of a 4-year college course at the time he ran and was elected to the Board representing Quezon. GM Ric, who headed the committee responsible for qualifying aspirants to the Board showed us a certification from the University of Makati signed by the Dean of his college attesting that Director Endriga finished his course sometime in October, thus was qualified to run in November. Subsequently, his Diploma was also submitted a few days ago, and among the signatories was also the Dean. GM Ric must have exerted every effort to ensure that Endriga was indeed qualified, because there apparently is a policy in Paleco that if ever a director gets disqualified for not meeting the minimum qualifications, the GM in whose term the disqualified director receives per diems and other benefits becomes personally liable therefore. This could be a double whammy for former GM Sarra, in whose term there were directors whose qualifications are doubtful.

That brings the tenure of Director Arzaga into controversy. The former by-laws of Paleco stated that a director cannot serve more than three consecutive terms. The NEA Reform Act also prohibits directors from serving more than three terms. But the Cooperative Development Authority, where Paleco has registered, has amended their general by-laws and now allows unlimited terms for officers and directors. If a case were to be filed with NEA complaining about Arzaga’s tenure, they would most likely waive jurisdiction as they would defer to the CDA on administrative matters, which they did when I filed a case against GM Sarra regarding her qualifications. We are therefore stuck with the overstaying director, whose opponent during the election has now been hired by Paleco as its Treasurer. Aren’t there any prohibitions against hiring also-rans? And isn’t Alladin Cruz an Electrical Engineer, with no background or experience in finance or treasury work? Why was he considered for the position of Treasurer, over those within Paleco who are more familiar with Paleco financial affairs? If one wants a high position job in Paleco, the easiest entry is by running for director and losing…

To quell the controversy about the goings-on in the Paleco Board, which seems shrouded in mysterious intrigue and secrecy, we asked GM Ric to propose to the Board that its meetings be open to observers from media and the members in the interest of transparency and accountability. The LGU legislatures’ sessions are open to the public, why can’t Paleco allow media and interested members to observe their proceedings, unless they have secrets to hide…

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The ploy of Cong Chikoy Alvarez and Gov JCA to exclude 5 specific protected areas from Congress’ version of the Expanded NIPAS bill was stymied by Cong Douglas Hagedorn this week. Said ploy has raised not a few eyebrows and is quite sinister in its stated purpose. Why specifically only those 5 protected areas, why exclude Tabon Caves, Malampaya Sound, Tubbataha Reef, Ursula Island, and what have you from the requested exclusion from the ENIPAS? It is well known that the PCSD is not the ideal protector of our resources, so that reasoning offered by GJCA and Cong Alvarez is flawed. Why Mt Matalingahan, with the planned renewal of mining rights of RTN? Why Rasa Island, where the Katalas who live there blocked the Panacan coal plant?

Why El Nido, where ACA could become the next mayor? Why the Puerto Princesa Underground River, which is not within the jurisdiction of GJCA but where black marble abounds? And I forget what the fifth PA that they want excluded is… Does GJCA believe that the PCSD and the SEP Law is sufficient protection for these natural resources? A lot of doubts about his true intentions need to be dispelled first, but GJCA seems to feel he has no need to explain himself to his constituents, thus the sinister plot thickens. Perhaps GJCA needs to be reminded that the Provincial Government of Palawan is not Philphos or Columbian Motors or any one of his multitude of corporations where he is answerable only to his shareholders, meaning himself. As Governor, he is answerable to all the citizens of the province, most particularly the poor and minorities, who he is duty-bound to protect and serve. All the hype about progress and development does little to impress the poor, and the minorities are concerned about the possible destruction of the protected areas, particularly Mt. Matalingahan. Sadly, GJCA can’t be bothered, now that he is assured of a second term. And there seems to be no one who can stand up to him, except for Cong Douglas, Pambansang Mayor Ed, and of course Art Ventura…

-0- The 1st Division of Comelec has on November 13th admitted into evidence the documentary exhibits filed by both Hagedorn and Bayron. The 1st Division will then appreciate the evidences, then rule on whether the case shall continue with the recount of the ballots in the remaining 80% clustered precincts, or else dismissed if no reasonable recovery will be established during the appreciation of the evidences submitted. We should know within two weeks when the recount will resume…