Cusi orders reallocation of Agus-Pulangi output

By Danessa Rivera (The Philippine Star) | Updated November 17, 2016 - 12:00am

http://www.philstar.com:8080/business/2016/11/17/1644426/cusi-orders-reallocation-agus-pulangi-output

MANILA, Philippines – Energy Secretary Alfonso Cusi has ordered to redirect the output of the government-owned Agus-Pulangi hydroelectric power plants (HEPP) to poor areas and Philippine Economic Zone Authority (PEZA) locations in Mindanao to provide affordable electricity to consumers as well as encourage investments in the region.

During the Coal Business and Policy Forum yesterday, the Energy chief directed the Power Sector Assets and Liabilities Management Corp. (PSALM) to study the re-allocation of the output of the Agus-Pulangi hydropower plants.

Part of the output—amounting to around 700 to 800 megawatts (MW)—would be distributed to poor regions in Mindanao while the rest would be directed to industries, he said.

“I have written a letter to PSALM to study allocating the output of Agus-Pulangi to the poorest of the poor, that means to say the ARMM region and the Lanao area and Maguindanao, so that we can help in the development of the area,” Cusi said.

“And the rest will be directed to PEZA so that we can encourage investments in Mindanao, so that we can compete against our neighbors for having cheaper electricity to offer to the manufacturing companies,” he said.

The 982-MW Agus-Pulangi hydroelectric power plants is owned by PSALM, the agency tasked to manage state-owned power assets, and is operated by state-run National Power Corp. (Napocor).

It is considered as the cheapest power source in Mindanao, with capacity being sold at around P2.70 per kilowatt-hour.

Currently, 34 electric cooperatives are negotiating to extend their respective contracts for the Agus-Pulangi supply after expiration, an opportune time to re-allocate the output to areas that critically need the cheap power supply, the DOE chief said.

“The contracts (with electric cooperatives) have expired. All ECs wanted to get longer contract, but what I said, at most we can give them one year to have transition, The intent of transition is to give time to ECs to make adjustment and for psalm (to plan) for the dispatch with NGCP,” Cusi said.

This would entail adjustments in the privatization schedule of the Agus-Pulangi HEPP, which is targeted in 2017 by PSALM. Under the Electric Power Industry Reform Act of 2001, all state-owned power generation and transmission assets should be privatized to break monopoly, pay off debts, foster competition among power players and bring down electricity prices.

“That (privatization of Agus-Pulangi) is now being studied,” Cusi said.

“But let’s not mix objective and direction. The redirecting the allocation of Agus-Pulangi has nothing to do with privatization. It’s just now that we want to give benefits to the poorest of the poor and promote industries in the region,” the DOE chief said.