By Christine F. Herrera | Mar. 03, 2014 at 12:01am
HOUSE leaders on Sunday lambasted the Manila Electric Co. for owing its customers P1.5 billion in refunds from 10 years ago while trying to collect P21 billion from them through higher power rates that the Supreme Court prevented them from charging.
“The problem with Meralco is that while it has been quick to distribute profits to shareholders by way of hefty cash dividends, and swift to jack up rates to the detriment of customers, the company tends to dawdle when it comes to repaying consumers,” House Deputy Minority Leader Arnel Ty said.
In House Resolution 882, Ty urged the House committee on energy to inquire into Meralco’s failure to fully comply with the Nov. 15, 2003 Supreme Court ruling for the company to give back to its customers some P30.2 billion in excess charges.
The overcharges stemmed from Meralco’s practice of passing off its corporate income taxes to its 5.2 million customers, which the Court disallowed.
“We were told that up to now, or more than 10 years later, Meralco has yet to refund at least P1.5 billion to about 260,000 customers,” Ty said.
Ty speaks for the minority bloc in the House committee on energy, and represents the Liquefied Petroleum Gas Marketers’ Association in Congress.
In an interview over radio dzBB, Oriental Mindoro Rep. Reynaldo Umali said every centavo per kilowatt-hour that Meralco wants to charge its customers translates to P9 billion a year at the P4.15 per kWh it seeks to impose.
Umali said Meralco would rake in another P12 billion for the P5 per kWh increase it seeks due to the Malampaya shutdown, bringing its impending windfall to P21 billion.
Umali, chairman of the House committee on energy, said his panel would compel the government to explain its approval of the “unreasonable” rate hike that the Meralco seeks to impose and pass on its customers.
Ty’s LPG-MA has been batting for stronger government supervision of the LPG sector and all energy markets, so as to reinforce consumer protection against potentially unfair trade practices and pricing abuses.
Ty filed his resolution shortly after Meralco came under more fire from consumer groups, this time for including the P4.15-per-kilowatt-hour rate hike in the February billing statements sent to customers.
Both the Department of Trade and Industry and the Energy Regulatory Commission (ERC) have already ordered Meralco to explain why the December rate increase, the subject of a temporarily restraining order from the Supreme Court, still found its way into consumers’ bills.
“We’ve examined Meralco’s February billing statement, and it definitely appears confusing and deceptive,” Ty said.
The DTI urged Meralco customers “to pay only the current amount due for February and to disregard the total amount due” that is inclusive of the P4.15-per-kilowatt-hour upward rate adjustment.
Meralco says it must increase its rates because it had to buy electricity at a higher cost when the Malampaya gas platform and other power plants shut down.
Ty invoked the Consumer Act in pushing for an inquiry into Meralco’s delayed compliance with the refund.
Meralco raked in a cumulative P48.733 billion in net profits from 2008 to 2012, and generously rewarded shareholders a total of P40.638 billion in cash dividends from 2009 to 2013, according to a Philippine Stock Exchange filing.
The country’s largest electricity distributor also earlier reported some P43-billion in inappropriate retained earnings. This suggests that after already paying out P40.638-billion in cash bonuses to shareholders, the company still has an extra P43 billion available for additional dividend payments.
Stock market analysts see Meralco reporting an incremental net profit of P19.409 billion in 2013 and P21.189 billion this year.
The Presidential Communications Operations Office Secretary Herminio Coloma said the Palace would wait for the Court’s decision on the rate increase.
“It is possible that the Court may also refer to its 2003 decision in addressing the current issue,” Coloma said. – With Joyce Pangco Pañares source
By Christine F. Herrera | Mar. 03, 2014 at 12:01am
PRESIDENT Benigno Aquino III’s allies in the House and the Senate on Sunday vowed to defy the President and reject the privatization of the Agus-Pulangui power plant by amending the Electric Power Industry Reform Act or Epira law.
House Speaker Feliciano Belmonte Jr, Oriental Mindoro Rep. Reynaldo Umali, who is also chairman of the House committee on energy, and Senator Francis Escudero said they will take the lead in the campaign to compel the government to address the blackouts in Mindanao, where rotating outages persist.
They said while the Epira required all government assets on energy generation, transmission and distribution to be privatized, that had not addressed the issue of providing the public with cheaper electricity.
Escudero filed a bill that seeks to amend the Epira law. The House members belonging to the Makabayan bloc also filed a counterpart bill in House Bill 351.
“I am against the privatization of the Agus and Pulangui hydro-power plants,” Belmonte said.
“I filed a bill to amend Epira. I don’t think a hearing has been held on this. I am against the privatization of Agus-Pulangui,” Escudero said.
“Epira changes centers on non-cross ownership of distribution, transmission and generation. The current system gives too much power to Meralco,” Belmonte said.
Umali said his panel would conduct public hearings in Cagayan de Oro and Marawi City on Thursday and Friday, respectively.
“We want to find out the real sentiment of the Mindanao people on the issue of Interim Mindanao Electricity Market, which, they claim brought the cost of electricity to shoot up,” Umali said.
“We will go to Marawi as requested by Autonomous Region in Muslim Mindanao Governor Mujib Hataman because the people are paying higher power cost despite being host to Lake Lanao where power is being sourced.”
Gabriela Rep. Luz Ilagan, who hails from Davao, said the Mindanaoans had long rejected the proposal to privatize power distribution and had been demanding instead the rehabilitation of the Agus-Polangi hydroelectric plant.
“Data show that should it be rehabilitated, it can give more than adequate supply to the whole of Mindanao,” Ilagan said.
“The thing is, certain sectors are pushing for alternative power such as coal. And guess what company has put up a coal plant in Davao del Sur? Aboitiz, the owner of Davao Light and Power and of Thermamobile and now Meralco’s source. .
Ilagan said solving Mindanao power problem was “PNoys election promise.”
“Like his Daang Matuwid that’s full of potholes, the promised light at the end of the tunnel is flickering and doomed to a total blackout,” Ilagan said.
Kabataan Rep. Terry Ridon said: “We support the Mindanao lawmakers’ position rejecting the Agus-Pulangui privatization. Baseload plants such as these cannot be subject to private operation and ownership if we intend to make Mindanao power affordable to the public and industries .”
Some areas in Mindanao, including Zamboanga del Sur, are still experiencing rolling blackouts of up to four hours.
Power outages in Zamboanga del Sur have been stretched from two hours to four hours as two units of coal-fired plant in Villanueva, Misamis Oriental remain offline, according to GMA News. source
SN Aboitiz Power Corp., the joint venture between Aboitiz Power Corp. and SN Power of Norway, expects to complete the refurbishment of the 360-megawatt Magat hydroelectric power plant in Ramon, Isabela and Alfonso Lista, Ifugao by the middle of the year, a company official said.
“We are on the last unit of the Magat refurbishment. We’ve put it down the middle of January of this year and we expect that to be running early June or earlier than that. After this unit is completed, the whole Magat facility has gone half-life refurbishment, something which has not been done in the 25 years that the plant has been operating under NPC [National Power Corp.]. So once this unit is done, it’s all completely new Magat,” SN Aboitiz president Emmanuel Rubio told repoters.
SN Aboitiz owns the 360-MW Magat hydropower plant, after offering the highest bid to the government amounting to $530 million in 2006.
Rubio said the refurbishment of the Magat facility would bring the maximum production capacity of each of the four units of the Magat hydro plants to 95 MW per unit, up from 90 MW per unit.
“We already submitted to the WESM [Wholesale Electricity Spot Market] the revised maximum production capacity, 95 MW per unit from 90. Now the maximum offer Magat can submit to the WESM is 380 MW,” he said.
Rubio said the refurbishment did not include the expansion of the Magat facility, a process which was still awaiting the approval of the Energy Department.
The company applied with the department for a renewable energy service contract covering the 115-MW Magat expansion.
“[It is] without yet the expansion component, because the application for expansion of Magat is still pending with the DoE,” he said, adding that SN Aboitiz had already completed the engineering study for the Magat expansion. source
In an ‘after-the-fact edict’ that may harm the future of the power industry’s investment viability, the Energy Regulatory Commission (ERC) is working on a regulatory band-aid measure aimed at enforcing ‘regulated price’ for capacities traded in the Wholesale Electricity Spot Market (WESM) during the Malampaya shutdown.
This will result in a reduction of the cost of electricity purchased from the spot market during the supply months of November and December.
According to sources, the initial calculation of the ERC on WESM price cut on the questioned supply months had been at P0.15 per kilowatt hour (kWh) – reckoned from average cost of power on reference supply months versus the price spikes of November-December which the ERC and Department of Energy (DOE) have been claiming to have been hit with “failure of market competition.”
The ERC was supposed to decide on the matter last Friday (February 28) and promulgate a decision, but they opted to deliberate further this week.
A member of the Commission also hinted that a manifestation on the WESM price slash will be filed with the Supreme Court (SC), in deference to the case questioning the P4.15 per kilowatt hour (kWh) rate hike of the Manila Electric Company (Meralco) on its December billing.
Even without completing yet the investigation on the alleged collusion of power generators, Energy Secretary Carlos Jericho L. Petilla admitted to the media that he was really exerting pressure on the independent quasi-judicial ERC to calculate a reduction on November-December WESM prices, as he lodged questions on the zero capacity offers made in the market for some trading intervals.
The ERC, however, is also at a loss as to what would be its firm legal basis for doing unilateral reduction in WESM prices – because in essence, spot trading of electricity as a commodity must be driven by market forces and underpinned by supply-demand dynamics on those billing months. Price-regulation of a spot market is extremely ironic.
Regulators have noted that ‘motu propio’ market intervention may do the trick. However, under prevailing rules, the circumstances in November and December had not been properly defined if these are really covered by ERC’s allowable intervention in the WESM; and if they really suspected wrongdoing, the regulatory body could have suspended the market prior not undertake post-incident rulings which are questionable. The lack of transparency on the proposed WESM regulated pricing is also igniting investor worries.
Last week’s draft decision of the ERC stipulated that the WESM “regulated prices shall be calculated based on the load weighted average ex-post energy price of the corresponding trading interval,” – the reference months supplied. source
POWER CONSUMERS have been given a reprieve from a universal charge increase that was supposed to have been billed starting January, the Energy Regulatory Commission (ERC) said, with National Power Corp. (Napocor) having asked for an implementation delay.
In a Feb. 17 order provided reporters last Friday, the regulator said the collection of an additional P0.0381 per kilowatt-hour (kWh) universal charge for missionary electrification (UCME) would now be done during the "August 2014 billing."
The deferment is a month longer than what Napocor requested last January. The ERC said the state-owned power firm wanted to "mitigate the impact of simultaneous increases of electricity rates and to alleviate the burden of the consumers."
Napocor President Gladys Cruz-Sta. Rita, in a telephone interview, yesterday said the company’s board of directors had taken note of recent events such as last year’s Malampaya maintenance shutdown, which has been blamed for a controversial P4.14/kWh Manila Electric Co. (Meralco) rate hike that has been ordered shelved by the Supreme Court.
The ERC’s Feb. 17 order was directed at Napocor, Power Sector Assets and Liabilities Management Corp. (PSALM) and all distribution utilities. Napocor and PSALM were also told to ensure sufficient fuel supplies for covered areas.
The UCME, as provided by the Electric Power Industry Reform Act of 2001, is imposed on all electricity end users for the purpose of funding the electrification of areas not connected to the main grids. Napocor’s Small Power Utilities Group (SPUG) is mandated by the same law to service these areas.
Malampaya’s scheduled maintenance shutdown, which ran from Nov. 11 to Dec. 10, prompted three natural gas power plants in Batangas to use more expensive liquid fuel. These plants supply power to Meralco, the country’s largest distribution utility.
The firm’s P4.15/kWh increase was to have been charged in tranches last December. The Supreme Court, however, issued a 60-day restraining order after party-list legislators and consumer groups filed a complaint.
Meralco, which says it will not benefit from the increase as this will be paid to power generators, has since asked the ERC to recover an additional P5.33/kWh, also to be implemented in stages.
Ms. Cruz-Sta. Rita said Napocor’s board of directors recognized "the need to alleviate the burden of any increase in electricity rates to end users."
"There is also a need to study and find solutions to mitigate the impact of simultaneous power rate increases and the DoE (Department of Energy) suggested the deferment of the of the implementation of UCME recoveries."
Mr. Cruz-Sta. Rita said Napocor’ finances were healthy enough to continue supporting operations in the off-grid areas. Deferment of the increase, he added, means the UCME rate will be maintained at P0.1163/kWh.
The ERC last October granted Napocor’s application to recover P2.57-billion in UCME to cover a 2010 shortfall. The P0.0381/kWh adjustment is be collected over a period of 12 months.
With the deferment, "collection will start in August and will end in July 2015," Ms. Cruz-Sta. Rita said.
Napocor, in its 2012 petition to recover the shortfall, said the increase would "augment its financial requirements and provide up-to-date recovery and adjustment of the succeeding years’ subsidy requirements."
It also said the increase would prevent fuel shortages and the possible shutdown of power plants running in off-grid areas. -- Claire-Ann Marie C. Feliciano source
To alleviate the burden of consumers, the Energy Regulatory Commission (ERC) has ordered the National Power Corp. (Napocor/NPC), the Power Sector Assets and Liabilities Management Corp. (PSALM) and all distribution utilities to defer the collection of the so-called universal charge missionary electrification (UCME) rate equivalent to P0.381 per kilowatt-hour for six months.
In an order dated February 17, the ERC said the deferment of the UCME collection started in February until July of this year. Thereafter, the collection of the UCME shall commence in the August 2014 billing for all consumers.
It was Napocor that initiated the deferment of the UCME as a means to mitigate the impact of the simultaneous increases in electricity rates as pushed by the Department of Energy.
Napocor said the deferment of UCME collection could be done in a manner that would still allow Napocor to maintain a sound financial condition through the use of strict financial controls.
“The NPC [Napocor] has taken the initiative of reviewing its financial condition and has determined that it can support the budgetary requirements and ensure the viability of its operations in the NPC-SPUG [Small Power Utilities Group] areas for a maximum of six months if it defers the implementation of UCME recoveries,” Napocor said.
While the ERC has approved the deferment, it also ordered Napocor and PSALM to pursue the following:
■ Ensure sufficient supply of fuel in SPUG areas;
■ Napocor and PSALM should continue to release missionary electrification subsidy to new power producers and qualified third parties in SPUG areas;
■ The deferment of the UCME should not prejudice the payment of the approved cash incentive benefits to qualified renewable-energy developers in missionary areas.
SN ABOITIZ Power-Magat, Inc. (SNAP-Magat) is spending some P500 million for rehabilitation of the last unit of the 360-megawatt (MW) Magat hydroelectric plant in Isabela within this semester, the company’s top official told reporters in Makati City on Wednesday last week.
“We are on the last unit of the Magat refurbishment. We’ve put it down the middle of January of this year and we expect that to be running by early June,” said Emmanuel V. Rubio, SNAP Group president.
Mr. Rubio said SNAP-Magat spent around P1.3 billion for the rehabilitation of the first three units and another P500 million is budgeted for the last unit.
“This is something which has not been done in the 25 years that the plant has been operating under Napocor (National Power Corp.),” the official noted.
The work involves overhaul of electromechanical equipment of the hydropower facility in order to ensure that the plant can run at full capacity.
“The project also aims to avert operational inefficiencies that usually come with many years in operation,” Mr. Rubio said.
Refurbishment of the facility -- which is located in a site straddling the municipality of Ramon in Isabela and Alfonso Lista in Ifugao -- started in 2009.
Besides the ongoing improvement of the power facility, SNAP-Magat also plans to expand the plant’s capacity by up to 115 MW.
Proposal for the expansion of the power plant that will involve installation of a new pump and storage system is still awaiting approval of the Energy department.
“The submission for the expansion to the Energy department is actually for a pump storage for additional 115-MW capacity,” Mr. Rubio said.
EXPANDING SNAP Group bagged the Magat facility after it submitted a bid of $530 million in an auction conducted by the government in December 2006.
Seven months after the official takeover of the Magat facility in April 2007, SNAP Group also acquired the 125-MW Binga and the 105-MW Ambuklao hydroelectric plants with its $325-million bid during an auction held in November 2007.
It took over operations of the plants -- both located in Benguet -- in July 2008.
SNAP Group is a joint venture of SN Power of Norway and Aboitiz Power Corp. (AboitizPower), which in turn is the listed power generation and distribution arm of Aboitiz Group.
AboitizPower’s profit dropped 22.26% to P14.6 billion as of September last year from P18.78 billion in the same nine months of 2012. In the same comparative periods, revenues fell 4.15% to P45.06 billion from P47.01 billion, while expenses dropped 8.24% to P29.07 billion from P31.68 billion.
Shares of the AboitizPower gained 60 centavos or 1.57% to end at P38.85 apiece on Friday last week from P38.25 each on Thursday. -- Claire-Ann Marie C. Feliciano source
TORONTO -- A trickle of new investment into global miners has created a tidal wave of interest among hundreds of small mineral explorers desperate for cash, a Reuters survey shows, setting the stage for a competition to raise funds that some are sure to lose.
The mining sector has been in a prolonged downturn. Only months ago, it was nearly impossible for small explorers to find investors, reducing some companies to raising as little as C$50,000 (US$45,100) at a time.
But recent fund-raising success for established miners and a few exploration companies like North Arrow Minerals, Inc.; Torex Gold Resources, Inc.; and Lydian International Ltd. has encouraged many tiny explorers, often called junior miners, that there is a window of opportunity to tap investors.
More than half of the Toronto Stock Exchange (TSX) and TSX Venture (TSX-V) miners and explorers that participated in the Reuters survey said they were “very likely” to seek financing in the coming 12 months, and roughly nine out of every 10 said they were at least “somewhat likely” to tap the market.
The issue is that there still isn’t a broad appetite in the investment community for miners, cautioned Jason Attew, managing director of global metals and mining at BMO Capital Markets.
“We are seeing some mojo back in the sector,” he said. “But, I do not want to characterize it as a market where every company can get financed. It is very selective with money going to high quality management teams and high quality assets.”
Others in the industry like Brendan Cahill, chief executive officer of silver miner Excellon Resources, Inc., agree that while money has begun to flow back into the sector, it has mainly gone to the big names and is beginning to filter down to the middle of the pack. But the juniors at the bottom of the field are yet to see much.
“For the exploration plays, other than the ones with the very highest quality projects, things are going to be tough for a while,” said Mr. Cahill.
TIPPING POINT Nearly half the 1,356 Canadian-listed mining companies for which Thomson Reuters data is available ended the third quarter with less than C$500,000 (US$451,700) in cash and short-term investments. Half a million dollars is about what it takes just to keep such a company open for a year, without any exploration activity.
To shore up just those companies with just C$5 million each, about the cost of running a thorough exploratory drill program for a year, more than C$3 billion in investment would be needed.
Mining companies listed on the TSX-V market raised C$5.9 billion in 2011, when metal prices were on a tear, but that fell to C$1.28 billion last year, underscoring the magnitude of the challenge these companies face.
Making it through the end of a down cycle, when an uptick starts, is often “the hard part,” said Tom Caldwell, the head of brokerage firm and wealth manager Caldwell Securities.
“The firms that hang in during the drought, the final ones that are hanging in there tend to fall off right at the uptick,” he warned.
Moreover, those that have survived so far by raising tiny amounts of capital are likely to struggle to do the same going forward.
“At this point, investors aren’t keen to invest in companies seeking just a few hundred thousand dollars to keep the lights on,” said Michael White, head of IBK Capital, a boutique investment bank that helps raise capital for explorers. “They want to know that the company is out there, doing some good work and creating value.”
The TSX and the TSX-V are home to nearly 60% of the world’s publicly listed mining firms. The vast majority are early stage mineral exploration companies that rely on equity markets to fund their drilling and advance their projects.
A rebound in the price of gold in the last two months is cause for some optimism, since the vast majority of the tiny publicly listed companies are focused on scouting for precious metals.
Spot gold, which peaked over $1,900 an ounce in 2011 and plummeted down near the $1,180 level at the end of 2013, has risen about 13% to $1,334 an ounce recently. Spot silver has risen to about $21.60 an ounce from about $19, since the end of the year.
“A lot of people back in 2013 were predicting metal prices would keep going lower, but we’ve had a bump up and that’s been a pleasant surprise,” said Ewan Downie, chief executive officer of gold exploration company Premier Gold Mines Ltd.
Mr. Downie, whose company is well capitalized and in no hurry to tap the market, said the uptick has pushed some generalist funds to consider investing in mining companies again.
“The financing window has opened slightly. I wouldn’t say it is wide open, but compared to where it was last year, companies are definitely in a better place, if they’re looking for money.”
The Reuters survey was conducted in late January and early February, online and on the phone. A random sample of TSX and TSX-V mineral exploration companies were asked to participate. -- Reuters source
House Speaker Feliciano Belmonte Jr. and several other lawmakers vowed to make the review of the Electric Power Industry Reform Act their priority agenda while others called for an outright repeal of the law after Mindanao last Thursday was plunged into darkness.
Belmonte said he has instructed the House committee on energy, chaired by Oriental Mindoro Rep. Reynaldo Umali, to attend to measures filed seeking to revisit the Epira law, which has been blamed for the high cost of electricity in the country.
“Of course, we will look into it,” Belmonte said in light of the recurring brownouts that hit Mindanao since last week.
Belmonte’s statement was echoed by House Deputy Majority Leader Sherwin Tugna, stressing that it is about time for the Congress to review the Epira Law in order to get into the bottom of the power problem.
“There should be more state intervention in the issue of blackouts in Mindanao. Power plant owners does not want to operate their plants because of high cost of materials to operate their plants. As a result, there is no source of power,” Tugna said in a separate interview with the Manila Standard.
Distribution facilities like cooperatives do not have have anything to distribute to the end consumers, and so the problem persists, he said.
Opposition Rep. Jonathan dela Cruz of Abakada party-list, member of the House Independent Minority Bloc headed by Leyte Rep. Ferdinand Martin Romualdez, lamented the Aquino’s administration’s inability to address the recurring power problem in MIndanao, as well as provide a long term solution to it.
“It is really sad that nothing significant has been done about the power situation in Mindanao. Four years after P-Noy (President Benigno Aquino III) promised to do something, and yet a promise remains a promise,” Dela Cruz said.
He also chided the Aquino government for empowering the private sector in handling the power problem.
“It appears the Aquino administration has left everything to the tender mercies of the private sector, principally Aboitiz, which is symptomatic of a skewed way of serving the greater good,” Dela Cruz lamented, adding that the government should be proactive and should not leave such ‘basic’ to private hands and let the public from the regulatory capture.
Rep. Walden Bello for his part said Epira did not pass the test of satisfying the consumers’ interest. “At the heart of this is power, greed and injustice,” Bello told a weekly forum at Annabel’s Restaurant in Quezon City.
“The culprit in the high cost of elecricity is the monopoly because of Epira,’ Bello said.
The Department of Energy was initially clueless as to the real cause of the brownouts in Mindanao that plagued the region last week. But it suspected the cause of the region-wide was equipment failure at a high-voltage switchyard that utility officials said is about 26 years old.
DOE Secretary Petilla also admitted that Mindanao will continue to suffer two- to three-hour blackouts even though the Agus-Pulangi plants are back online.
Petilla said Steag State Power Inc. ‘s 210 megawatt coal-fired power plant remains offline after the system-wide blackout experienced at 3:53 am Thursday morning. With Rio Araja source
Mindanao solons vow to stop govt power plan Manila Standard Today By Christine F. Herrera Mar. 01, 2014 at 12:01am MINDANAO and leftist lawmakers vowed Friday that not even the government threat of massive blackouts would break their resolve to reject the Aquino administration’s plan to privatize the Agus-Pulangui hydro-electric power plants. The militant lawmakers and the People Opposed to Unwarranted Electricity Rates or Power joined Mindanao congressmen in lambasting the government for “bungling” the power situation on the island, which suffered a 16-hour blackout Thursday.They also expressed alarm over the government’s continuing failure to address the critical power shortage plaguing Mindanao for the last five years.
Islands in light and darkness. The town floats of the municipalities of Bacnotan and Aringay (inset) brighten up the streets of Aringay, La Union, in Luzon during a parade of electric floats while a schoolgirl (left) does her homework by the light of an improvised lamp in Cotabato City, which was plunged in darkness by the power woes of the entire Mindanao island. CHRISTINE JUNIO and OMAR MANGORSI
"Maybe it’s time Energy Secretary Jericho Petilla look for another job,” said former Bayan Muna Rep. Teddy Casiño, a Power convener, after the Energy Department remained clueless about what caused Thursday’s widespread outage 24 hours afterward.
The blackout, Casiño said, came on the heels of the surprise revelation that in areas of Southern Mindanao that were devastated by typhoon Pablo in 2012, 57 percent of villages still had no power despite billions of pesos spent on rehabilitation.
In a press conference Friday, Petilla said Thursday’s massive outage might have been caused by a malfunction in the Agus 1 hydro-electric plant in Lanao del Sur which took down five other plants, but he said this still needed to be verified.
“The switch there is the suspect right now, but it needs further investigation,” Petilla said.
At the same time, Petilla admitted that Mindanao will continue to suffer two- to three-hour blackouts even though the Agus-Pulangi plants are back online.
Petilla said Steag State Power Inc. ‘s 210 megawatt coal-fired power plant remains offline after the system-wide blackout experienced at 3:53 am Thursday morning.
“What will happen if Steag will continue to go offline during summer? I don’t think that will happen at this point but they can’t give a definite answer when it will be up and running. We’re not talking about months. I think they are getting some consultants at this point,” Petilla said.
Eugene Vicar, National Grid Corporation of the Philippines head for Mindanao operations and Rolando Bacani, president of the National Transmission Corp., said without the Steag plant, the grid will continue to suffer two to three hour brownouts.
“[People will experience] two- to three-hour brownouts until Steag is back,” Vicar said.
Petilla said without Steag, power in Mindanao is only 80 percent to 85 percent restored.
Petilla also urged electric cooperatives to buy power from the Interim Mindanao Electricity Market (IMEM), even though power costs more.
“I’m really hoping that they will utilize the IMEM...It may not be priced at P3 (per kilowatt-hour) but that’s the reality,” Petilla said.
But Mindanao lawmakers and their allies from the left rejected Petilla’s approach.
“The Mindanao lawmakers will continue to oppose the privatization of the Agus-Pulangui hydropower plants because we believe it was the State’s obligation to provide cheaper power to the people and privatizing it would drive the power cost to shoot up,” said Cagayan de Oro Rep. Rufus Rodriguez.
Casiño said Mindanao’s power woes will only get worse because the Energy Department under Petilla is bent on implementing the IMEM, a clone of the Wholesale Electricity Spot Market (WESM) in Luzon, which was responsible for the highest power rate hikes in history.
“The premise that Mindanao has been unjustifiably enjoying “cheap” power rates is totally wrong. True, Mindanao has lower power rates than Luzon and the Visayas. But Mindanao is actually paying much more than most major cities in Asia,” said House Senior Deputy Minority Leader Neri Colmenares and Bayan Muna Rep. Carlos Isagani Zarate, authors of House Bill 351 that seeks the repeal of the Electric Power Industry Reform Act (EPIRA).
“It is a sad fact that residential consumers in Cagayan de Oro City, the Autonomous Region in Muslim Mindanao (ARMM), Northern Mindanao, and the Davao and CARAGA regions are paying twice the electricity rates of residents in Seoul and Beijing,” Colmenares said.
As of 2011, Zarate said, the Philippines had the highest cost of electricity in Asia with an average retail rate of $0.18 per kilowatt-hour, easing out Japan that had $0.17 US cents per kilowatt-hour.
The latest available comparative data from the 18th EPIRA Implementation Status Report show that Mindanao has an effective residential electricity rate of P6.69 per kilowatt-hour, Zarate said.
“Luzon has P9.84 per kWh and Visayas has P8.19 per kWh. Except for CARAGA, all the Mindanao regions have more expensive residential power rates than Hong Kong SAR. These regions, including Cotabato City, Iligan City, Socsksargen, and the Zamboanga Peninsula all have higher residential rates than major Asian capitals like Taipei, Kuala Lumpur, Jakarta, New Delhi, Bangkok, and Shanghai, among others,” Colmenares said.
“All in all, Mindanao is paying an average of P1.82 per kWh more for electricity than the 31 major cities in Asia and Oceania as surveyed by the Japan External Trade Organization,” Colmenares said.
Worse than WESM, which operates under the limited power supply in Luzon, IMEM will be operating in Mindanao where there is an acute power shortage, Casiño said.
He echoed Rodriguez’s position that IMEM will lead to even higher prices, with power generators having a heyday manipulating the spot market.
Rodriguez said the House committee on energy, of which he is a member, would push to stop IMEM as “it aggravates, [rather] than solves the current power situation in the island.”
The House energy panel, Rodriguez said, would be holding an inquiry on Thursday in Cagayan de Oro to find out from the government how it plans to address the impending power crisis. The panel would also review the EPIRA law and put a stop to the IMEM operations.
If IMEM is allowed to adopt the same WESM schemes such as high clearing prices and automatic pass-through charges, electricity consumers all over Mindanao would suffer higher rates, Casiño said.
Already, Mindanao’s electric cooperatives are up in arms over IMEM’s more than P200 million in excess billing from Nov. 26-Dec. 25, where it charged the cooperatives for electricity that allegedly was neither ordered nor delivered, he said.
“The ECs have refused to pay said charges and are poised to ask the courts to declare IMEM illegal,” said Casiño, who comes from Davao City.
The IMEM is managed by the Philippine Electric Market Corp. (PEMC), the same company that oversees the WESM, he said.
Among the bills to be tackled in the House panel hearing is HB 351 that seeks to amend the “failed policy known as the Electric Power Industry Reform Act (EPIRA) in light of the raging power crisis in Mindanao and the long-term vision that the vital power industry should not be left to the vagaries of private interests to the detriment of our country’s national development requirements.”
“It will be wrong for government to fully let go to private hands the vital power generation sector. It will be doubly wrong for government to side with private power firms who want high prices instead of consumers and investors who want low electricity rates,” Colmenares and Zarate said.
It is important to note that these generation assets have continually reaped dividends for the government and the people and will continue to do so in the long-term, they said.
“This bill shall put a stop to the privatization of state power assets – particularly the remaining assets still in government hands – to help keep power rates stable and to keep what should be kept in state hands for the benefit of the Filipino people,” the bill’s authors said.
In the House, an administration ally revived his proposal to grant President Benigno Aquino III emergency powers to deal with the power crisis.
Eastern Samar Rep. Ben Evardone said his bill would give the President the authority to enter into a negotiated contract for the construction of new government-owned power plants.
The bill would also give the President the power to suspend value-added tax collection, “when necessary” to reduce power rates.
But Gabriela party-list Rep. Luz Ilagan said the Aquino government should be able to come up with a long-term solution to the on and off power crisis in Mindanao.
She said it has been more than three years since President Aquino assumed office in 2010, but the power situation that he inherited remained a mess.
Ilagan also called for the repeal of EPIRA, which she blamed for the high cost of electricity.
“The power problem had been there before the Aquino government because of the EPIRA and the refusal of the (past administration) to rehabilitate the Agus-Pulangui power source in Mindanao,” Ilagan said.
She also said the rotating blackouts could be an artificial measure aimed at forcing local government units to accept alternative forms of power, such as coal.
Administration allies Cavite Rep. Elpidio Barzaga, Jr., Ako-Bicol party-list Rep. Rodel Batocabe and House Deputy Majority Leader and Quezon City Rep. Bolet Banal, however, insisted the privatization was the key to solving the country’s power problem.
“We lack world class corporations who are willing to make huge investments in our country and develop our natural resources in order to effectively address our power problem. Liberalization of our
restrictive economic policies might induce the international power players to infuse capital to the Philippines and solve our perennial problem in electricity,” Barzaga said.
Batocabe shared a similar view.
“Mindanao, at the rate of power plants are being constructed there, will have more than sufficient power by 2016. The challenge now is how to harness this excess power in the Visayan Island,” he said.
Banal warned that “unless the government is able to entice more investments in the power sector, Mindanao should brace itself for more power interruptions and rotating brownouts in the coming months.” With Alena Mae Flores and Maricel V. Cruz source
DAVAO CITY experienced on Thursday prolonged city-wide power and water interruptions brought by a power disturbance that hit the National Grid Corporation of the Philippines (NGCP).
At 3:53 a.m. on Thursday, Mindanao experienced an island-wide blackout, but as of 6 p.m., the NGCP is "still determining the cause" of the power disturbance.
The city experienced a nine-hour power interruption, which started from 3:35 a.m. until 12:26 p.m. when power was totally restored. The Davao City Water District, on the other hand, has yet to restore water supply in some parts of the city as of 6 p.m. Thursday.
An engineer of NCCC Mall in Matina, Davao City looks after the huge generator sets following Thursday's city-wide power interruption caused by power disturbance experienced by the National Grid Corporation of the Philippines. (King Rodriguez)
"Yung na monitor na disturbance, nawala ang kuryente. Hindi po kami gumawa niyon, nangyari lang po iyon. Ang ginawa namin is nakipag-coordinate kami sa power plants at sinusubukan po namin ibalik ng isa't isa yung kaya ng tumakbo," Alabanza said.NGCP spokesperson Cynthia D. Perez-Alabanza, in a phone interview with Sun.Star Davao, said NGCP was not the reason for the island-wide blackout.
She said as early as 6 a.m., some areas in Mindanao have already been energized.
Alabanza said the cause is still being determined and they will not release a statement yet as to what probably caused the power outage.
"Hindi lang NGCP ang involved dito pati po yung ibang power suppliers kagaya ng distribution utilities," she said.
Alabanza said NGCP's focus right now is the restoration of electricity on the island. She said they hope to restore everything fully as soon as possible.
She said NGCP has deployed teams as early as 4 a.m. to check on the grid. The incident is also being closely monitored in their systems operations in Cagayan de Oro.
A statement issued by the Davao Light and Power Company (DLPC), a subsidiary of Aboitiz Power, said the company "immediately implemented contingency measures and within minutes power supply were received from its embedded power sources" -- the standby Power Plant in Bajada and Hedcor's Sibulan hydropower plant.
DLPC said the first attempt of gradual restoration started at 5:52 a.m. after it received power from NGCP, but the power in the entire franchise was interrupted anew at 6:38 a.m.
In its Facebook page, DLPC said that by 7:30 a.m., areas of Puan up to Tibungco have been restored. However, at 8 a.m., "power disturbance was again experienced causing another total power interruption in the electric utility's entire franchise area."
DLPC said that at 9:30 a.m. gradual restoration started in most parts of the Davao Light franchise until full restoration at 12:26 p.m.
"Davao Light is still waiting for the advice from NGCP as to the cause of the said total blackout. Although the power outage was beyond, Davao Light's control, it expressed its deep apology to its customers for the inconvenience that they experienced," DLPC said.
DCWD spokesperson Imelda Magsusi, in a phone interview with Sun.Star Davao, said the water outage was also caused by the loss of power.
"The source of our water is ground water which is being pumped, so for the water to be pumped electricity is needed. When we lost electricity, the pumping stopped," she said.
Magsusi said that when the power outage happened at 3:53 a.m., there was no loss of water immediately since they still had enough supply in their storages. However, water supply was gradually depleted in the morning.
Magsusi said when the power returned at 12:26 p.m. water supply was slowly being pumped back to their franchise. She said those in the lower areas should expect full restoration as of Thursday while those in the further and elevated areas of the city can expect to get water by today.
"The Talomo water pumps are also almost reaching normal operations since four pumps are already running," she said.
On its Facebook page, DCWD also announce the postponement of three sets of water cuts scheduled on February 28 to March 2 due to the "unexpected citywide water interruption on February 27 caused by the Mindanao-wide power outage."
"The DCWD management sees that continuing with the water cuts will immensely burden supposedly would-be affected customers especially that some areas are still recovering from the emergency water outage in the city. Thus, it has decided to postpone these water cuts until further notice," DCWD said. source
BYPIA RANADA POSTED ON 03/01/2014 9:28 AM | UPDATED 03/01/2014 9:56 AM
CLEARING OPERATION. Farmers and other Poocan locals form a human barricade in front of a bulldozer dispatched by Caluya Mayor Genevieve Lim-Reyes and Semirara Mining Corp. Photo from Theo Mateo
MANILA, Philippines – Two farmer leaders and one member of a non-governmental organization were arrested on Friday, February 28, while forming a barricade to stop a bulldozer from clearing rice fields in Sitio Poocan on Semirara Island, Antique province.
Farmer leaders Mark Kato and Bernard Magdaug, as well as Theo Mateo, a member of Pakisama(Pambansang Kilusan ng mga Samahang Magsasaka) were arrested for illegal assembly that afternoon, confirmed Mayor Genevieve Lim-Reyes.
The barricade was formed by farmers since Thursday, when a bulldozer dispatched by the DMCI-owned Semirara Mining Corporation (SMC) attempted to clear 5 hectares of rice fields. According to the mayor, the rice fields are to be turned into a relocation site with housing for around 100 families from Sabang, a nearby village.
"It was purchased by the local government of Caluya mainly for its inhabitants in the said area who have no houses to shelter their families in or who would want to transfer their residences," Lim-Reyes told Rappler in an email.
She added that SMC's involvement in the operation was only upon the request of the town because SMC had the necessary heavy equipment to get the job done.
However, an SMC assistant administrator called the relocation site a "joint project" with the town and part of the corporate social responsibility program of the company.
According to Mateo, personnel of the local government unit (LGU) surveyed the 5 hectares of rice fields to be cleared last January 23 and already installed a mohon or marker.
Hours before the arrest, an official from the Department of Agriculture visited the site to assess the rice fields in order to create a compensation offer for the farmers.
Sabang land
The 100 families to be relocated from Sabang currently live on 3 hectares of land that locals suspect SMC and the LGU want to turn into a waste facility for the company's coal-fired power plant. Called a waste tailings pond, it stores and filters waste from coal combustion. An ill-maintained tailings pond could cause the waste to spill into the sea.
Lim-Reyes denied that the Sabang land would be turned into a tailings pond but did not say what the land would be used for.
SMC, owned by DMCI, was able to extend their contract to mine coal on the island until 2027. The first contract ended in July 2012. (READ: Court blocks Palawan DMCI coal plant)
Locals vehemently opposed the expansion of SMC's contract. Last October 22, around 400 locals rallied simultaneously in front of the Semirara village hall and Caluya municipal hall to say no to the mining expansion.
They fear that the continued mining and combustion of coal will endanger the marine and land ecosystems which most locals depend on for their livelihood. Around 30% of the population are seaweed farmers whose crops are particularly vulnerable to spills or contamination that could occur if the mine's facilities fail.
SMC is the biggest producer of coal in the country and operates the only open-pit coal mine in the Philippines, according to their website. Around 90% of all the coal being produced in the country comes from the mine. – Rappler.comsource
ByMichael Lim Ubac 3:13 am | Saturday, March 1st, 2014 Philippine Daily Inquirer
Energy Regulatory Commission Chairperson Zenaida Cruz-Ducut. PHOTO BY RICHARD A. REYES
MANILA, Philippines—Embattled Energy Regulatory Commission (ERC) Chair Zenaida Ducut has asked Malacañang to be given more time to answer the charge that she failed to protect power consumers when she gave tacit approval to the record-high rate increase announced by the Manila Electric Co. (Meralco) last December.
Ducut’s legal move allows her to momentarily delay an investigation being spearheaded by the Office of the Executive Secretary of her supposed complicity in the questionable power rate increase.
There were calls for Ducut to resign after Meralco announced a huge P4.15/kilowatt-hour increase to be implemented in three tranches from December 2013 to March 2014. The Supreme Court has issued a temporary restraining order (TRO) stopping the hike.
Ducut has asked for more time to answer a complaint for gross neglect of duty filed by Akbayan Representatives Walden Bello and Ibarra Gutierrez, who contended that Ducut was liable for not looking after the interest of consumers, which is her duty.
The two lawmakers sought Ducut’s preventive suspension while the charges against her are being investigated.
‘Usual course’
A Palace deputy spokesperson said on Friday it was Ducut’s right to file a motion for an extension to file her answer.
“She asked for additional time to answer the allegations… As far as I know she will be given time to do so. This is usual in the course of the procedures that have been conducted by the Office of the President,” said Undersecretary Abigail Valte.
Valte, a lawyer, explained that it was “normal” for aggrieved parties to file “motions for extension of time.”
“So due to the confidentiality of the process, we will not be able to give you any more updates until such time that it is resolved—that both are finally resolved by the Office of the President,” Valte said.
She added: “The Office of the President has always been on guard against dilatory motions that may be filed that are just intended to delay the process.”
Meralco said the rate increase stemmed from the shutdown of the Malampaya gas pipeline and other power plants for maintenance from Nov. 11 to Dec. 10, 2013. This resulted in a shortfall in Meralco’s supply, forcing it to buy additional, more expensive power from the spot market.
Critics accused the country’s biggest power distributor and generating firms of colluding to jack up power rates.
Second complaint
She confirmed that a second complaint was filed against Ducut by a group of 15 sectoral leaders citing essentially the same ground—that Ducut failed to protect the Filipino consumer when she allowed Meralco to jack up its rate “without any public consultation or regulatory investigation.”
“I confirmed that the second complaint was indeed filed in the Office of the President. It will be subjected to the same process as the first complaint that was filed, I think, about a month ago,” Valte said.
The second complaint for “gross negligence” was filed Thursday in the Office of the President.
One of the complainants, Manny Manato of the Santolan Riverside Neighborhood Federation, asked:
“How she could have failed to exercise the barest minimum of regulation to a proposed power rate hike that is appallingly high is unimaginable?
“Ducut’s failure to act knowing too well that the record-high generation charge will be passed to hapless consumers is mind-boggling, if not ruthless,” he said.
Manato said Ducut had no business leading a regulatory body, as her “continued stay in office was a mockery of the concept of regulation with the public at the losing end of this cruel joke.”
Newly minted statement
At a hearing on Thursday, the Department of Trade and Industry (DTI) ordered Meralco to explain the confusion arising from new entries in its latest billing statement.
Prior to this, consumers pay the monthly due called “total current amount” to avoid disconnection.
On February this year, Meralco surprised its consumers when it unveiled a new billing statement that has three new categories under the topmost entry, “account summary for account number,” to wit: “balance from previous billing,” “current charges” and “total amount due.”
The DTI told Meralco to conduct information dissemination campaign for consumers to understand the latest billing statements and to clarify the confusion among the public on the difference between the amount due, as well as the total amount due, she said.
“So it was clarified that the subscribers need not pay the amount described as ‘deferred’ pending resolution of the Supreme Court TRO. So these amounts apparently were included in the billing for purposes of being transparent to its subscribers who are affected by the pending resolution of the Supreme Court,” she said. source
To alleviate the burden of consumers, the Energy Regulatory Commission (ERC) has ordered the National Power Corp. (Napocor/NPC), the Power Sector Assets and Liabilities Management Corp. (PSALM) and all distribution utilities to defer the collection of the so-called universal charge missionary electrification (UCME) rate equivalent to P0.381 per kilowatt-hour for six months.
