DTI summons ERC over Meralco billings

Manila Bulletinby Madel Sabater - Namit
February 27, 2014

Malacanang on Thursday said the Department of Trade and Industry (DTI) has summoned the Energy Regulatory Commission (ERC) and the Manila Electric Co. (Meralco) following consumer complaints on the Meralco billing.

Consumers who received confusing Meralco billing statements for February are encouraged to report it to the Department of Trade and Industry. (photo from meralco.com.ph)

“We received word that the Office of the DTI – Consumer Protection Group (CPG) under Usec. Victorio Dimagiba has summoned the ERC and Meralco regarding the consumer complaints about the latest Meralco billing,” Deputy presidential spokesperson Abigail Valte said.

She said the meeting was held Wednesday morning at the DTI main office in Makati City.

The Palace official has urged the public to file a complaint before the DTI with regards to their latest Meralco billing if they find it confusing.

“As a general rule, I’m not speaking of specifics, whenever the DTI receives particular consumer-related complaints, they do work with the business or the corporation and question to address these complaints,” Valte said.

Consumers expressed confusion after their Meralco bill for February showed a “total amount due” and “total current bill amount.”

Meralco was seeking for a power rate hike to be implemented in three tranches: P2.41 per kilowatt hour (kWh) last December; P1.21/kWh this February; and P0.53/kWh in March. The said power rate hike was said to be the highest power rate increase if implemented.

The implementation of the power rate hike, however was blocked by a temporary restraining order (TRO) by the Supreme Court (SC).   source

The Philippines’ power generators have an attitude problem

Manila Times.net

February 26, 2014 11:31 pm

by Ben D. Kritz

Ben D. Kritz

This past Monday, I attended a “public consultation hearing” conducted by the Energy Regulatory Commission (ERC) for the purpose of gathering comments and suggestions from concerned parties about a proposed new set of rules governing the development and approval of Power Supply Agreements (PSAs) between electricity generators and distribution utilities.

The timing of the hearing takes on added significance because of the ongoing Manila Electric Co. (Meralco) rate hike scandal, but only coincidentally; the proposed new rules has been in the works for about a year, and Monday’s hearing was the second of what will be at least three rounds of consultations before the final version of the rules is produced.

Although these kinds of hearings are, as they should be, “public” hearings, they tend to be dominated by the stakeholders who will be most affected by the subject matter, in this case the electricity generating companies and the distribution utilities. The average individual member of the public would likely find the affair tedious (Monday’s hearing lasted about three hours) and highly technical, but it is somewhat discouraging that the consumer point of view does not seem to be represented at all. Political and “civil society” actors who have otherwise been quick to jump into more stylish exercises like street protests and court cases are apparently not inclined to trouble themselves with the gritty everyday details of how business arrangements eventually become the rates we pay for electricity.

In the course of the hearing, which was the third of this round of consultations conducted by the ERC (similar hearings were held in Davao and Cebu last week), it quickly emerged that the country’s power generation sector—with one admirable exception—is desperately trying to maintain its position as a monolithic, unregulated industry that can conduct business as it sees fit. In the proposed new rules, there are four hotly contested issues putting the generation sector at odds with most distributors, and to some extent, with the ERC itself, even though to its credit the agency is trying to maintain a fair balance of interests:

*Competitive Bidding vs. ERC Assessment and Approval of proposed power supply rates—The new rules stipulate a process for distribution utilities to source power suppliers through a competitive bidding process, in keeping with the general mandate to provide power to consumers at the “least cost”—which may not necessarily mean the “lowest” cost, but the one that properly balances the price with reliability of the supply. Once the bidding process is completed, the resulting power supply agreement between the winning supplier and the distribution utility must be analyzed and approved by the ERC, which may result in the contracted rates and other terms of the PSA being modified or disallowed.

From the point of view of the generation companies—who were strongly supported by both Meralco and the Philippine Chamber of Commerce and Industry—a negotiated contract developed from a competitive bidding process should be considered sacrosanct and should not be at risk of alteration by the ERC. The rationale is that a competitive bidding should naturally result in the “least” or “most efficient” cost, and therefore further ERC examination is unnecessary. And of course, to further support their point of view, the parties disagreeing with the proposed rule resorted to the cheap tactic favored by Meralco and its supply partners: Making a thinly veiled threat that rules they consider unfavorable would discourage investment and electric market activity, and could lead to deficiencies in electric supply for consumers.

*Use of benchmarks in determining reasonable power rates—Although the ERC clarified that this part of the proposed new rules is still subject to a considerable amount of study and revision, generation companies are balking at the suggestion that benchmark rates might be used as guidelines for the ERC to determine the validity of rates presented in PSAs. While the ERC seems to be leaning toward a framework wherein benchmarks are not necessarily flat rates, but rather a standardized set of rate components, the generation sector naturally believes that any guidelines will restrict their freedom to determine power prices.

*Applications for ERC approval of PSAs must be made jointly by the generators and distributors—This provision was stridently protested by the generators, who are attempting to hide behind a provision of the Electric Power Industry Reform Act (Epira) to pass the responsibility (and though unstated, the attendant costs) of managing approval requirements on to the distribution utilities alone. The reasoning is that under Epira, the generation sector is treated as an unregulated sector, that is, one that is not imbued with the same public interest as the distribution sector that delivers electricity directly to end-users, and is therefore not really under the oversight of the ERC. The position of the ERC, however, is a bit less generous toward the generators than the latter supposes. While the generators may be unregulated by the ERC as business entities, their transactions with other, regulated distributors certainly are subject to ERC examination; the implication is that, despite protests from the generating sector, the joint-application rule will be kept.

*The proposed new rules seem to override “walk-away” provisions that are common features of supply contracts—This is one issue where the generators and distributors seem to agree, and one in which their dissent against the proposed rules might actually be valid.

The way in which the new rules are written, a “walk-away” provision in a PSA, a perfectly ordinary and prudent condition to cover the parties in case of unforeseen, uncontrollable circumstances or the failure to perform by one of the parties, could be invalidated by ERC, in effect tying the parties to the PSA whether it is working or not. The ERC, however, made a good point in response to this; some flexibility in interpreting “walk-away” clauses must be maintained, because they can be abused. For example, a “walk-away” clause that cancels the contract in the event of the ERC altering any of the contract terms could render the entire approval process invalid, and would obviously have to be disallowed.

The stark takeaway from the discussion on the proposed new rate-setting rules is that the Philippines generating sector has a severe attitude problem: It believes itself to be above any sort of oversight, and assumes the authority to dictate the overall cost of electricity for the country, public interest and economic benefits be damned. The one exception to this infuriating point of view is that expressed, ironically, by a company that is largely foreign-controlled: Kepco Philippines, which is the local component of Korean utility giant Kepco and which operates the Ilijan combined-cycle gas plant as well as plants in Naga and Cebu.

Except for some minor concerns over parts of the new rules that are admittedly a little vague, Kepco seemed to disagree with most of the positions of the other generators, particularly with respect to the issue of joint applications. Once again, it seems that the natives could learn a few things from the guests about how to behave properly and still turn a nice profit.   source

benkritz@outlook.com

Huge thermal plant opens as solar industry grows

Manila Bulletinby AP
February 26, 2014

Primm, Nevada – A windy stretch of the Mojave Desert once roamed by tortoises and coyotes has been transformed by hundreds of thousands of mirrors into the largest solar power plant of its type in the world, a milestone for a growing industry that is testing the balance between wilderness conservation and the pursuit of green energy across the West.

The Ivanpah Solar Electric Generating System, sprawling across roughly 5 square miles (13 sq. kilometers) of federal land near the California-Nevada border, formally opens Thursday after years of regulatory and legal tangles ranging from relocating protected tortoises to assessing the impact on Mojave milkweed and other plants.

The $2.2 billion complex of three generating units, owned by NRG Energy Inc., Google Inc. and BrightSource Energy, can produce nearly 400 megawatts –  enough power for 140,000 homes. It began making electricity last year.

Larger projects are on the way, but for now, Ivanpah is being described as a marker for the United States’ emerging solar industry. While solar power accounts for less than 1 percent of the nation’s power output, thousands of projects from large, utility-scale plants to small production sites are under construction or being planned, particularly across the sun-drenched Southwest.

The opening of Ivanpah is “a dawn of a new era in power generation in the United States,” said Rhone Resch, president of the Solar Energy Industries Association, a trade group. “We are going to be a global leader in solar generation.” The plant’s dedication comes as government continues to push for development of greener, cleaner power.

President Barack Obama has mounted a second-term drive to combat climate change, proposing first-ever limits on carbon pollution from new and existing power plants. His plan aims to help move the U.S. from a coal-dependent past into a future fired by wind and solar power, nuclear energy and natural gas.

According to U.S. Energy Information Administration data, the cost of building and operating a new solar thermal power plant over its lifetime is greater than generating natural gas, coal or nuclear power. It costs a conventional coal plant $100, on average, to produce a megawatt-hour of power, but that figure is $261 for solar thermal power, according to 2011 estimates. The figures do not account for incentives such as state or federal tax credits that can impact the cost.

Ken Johnson, a spokesman for the solar association, said in a statement that solar systems have seen “dramatic price declines” in the last few years. That’s good for utilities in California, which must obtain a third of their electricity from solar and other renewable sources by 2020.

The Ivanpah site, about 45 miles (75 kilometers) southwest of Las Vegas, has virtually unbroken sunshine most of the year and is near transmission lines that carry power to consumers. Using technology known as solar-thermal, nearly 350,000 computer-controlled mirrors roughly the size of a garage door reflect sunlight to boilers atop 459-foot (140-meter) towers. The sun’s power is used to heat water in the boilers’ tubes and make steam, which drives turbines to create electricity.

While many people are familiar with rooftop solar, or photovoltaic panels, “these are a little bit different. This takes the sun’s rays and reflects them onto towers,” said NRG spokesman Jeff Holland. The plant can be a startling sight for drivers heading toward Las Vegas along busy Interstate 15. Amid miles of rock and scrub, its vast array of mirrors creates the image of an ethereal lake shimmering atop the desert floor. In fact, it’s built on a dry lakebed.

Google announced in 2011 that it would invest $168 million in the project. As part of its financing, BrightSource also lined up $1.6 billion in loans guaranteed by the U.S. Energy Department. Ivanpah can be seen as a success story and a cautionary tale, highlighting the inevitable trade-offs between the need for cleaner power and the loss of fragile, open land. The California Energy Commission concluded that while the solar plant would impose “significant impacts on the environment … the benefits the project would provide override those impacts.”   source

Semirara Mining, mayor threaten to bulldoze rice fields

rappler.com

BY PIA RANADA
POSTED ON 02/26/2014 5:08 PM  | UPDATED 02/28/2014 6:39 PM

ATTEMPTED DEMOLITION. The locals of Poocan in Semirara Island, Caluya town in Antique oppose the attempted bulldozing of their ricefields. All photos from PAKISAMA

MANILA, Philippines – Farmers have barricaded their rice fields in Sitio Poocan in Semirara Island, Antique province, after Semirara Mining Corporation (SMC) personnel tried to bulldoze their crops on Tuesday, February 25.

Two trucks, one bulldozer, and 4 security guards of the DMCI-owned company tried to enter the village at around 4:30 pm, said Theo Mateo, a member of Pakisama (Pambansang Kilusan ng mga Samahang Magsasaka), an NGO that works with fishermen and seaweed farmers in Semirara Island.

The farmers were told by the guards that the bulldozing was ordered by Caluya Mayor Genevieve Lim-Reyes, who plans to turn the land into a relocation site for around 100 families from Sabang, a nearby village, where a waste facility for their coal power plant will allegedly be built.

As of posting Wednesday, the bulldozer is parked outside the rice fields and is being watched by a guard. An SMC assistant administrator who did not wish to be named said they are awaiting orders from the mayor.

Rappler texted Lim-Reyes for her statement but received no reply.

Around 29 households or 70 people will be affected if the demolition is given the go signal. Many of them are farmers who have been tilling the rice fields for more than 30 years.

"Dito na kami lumaki at tumanda. Hindi kami papayag na basta-basta nila kami paaalisin (We grew up here and grew old here. We won't allow them to make us leave)," said village leader Angie Ysug.

Watch this report below.

Lim-Reyes had apparently visited the village weeks ago to ask the locals to voluntarily give up their rice fields so that the relocation of Sabang families could take place, but the locals were not told that it was a done deal.

"The families have received no formal eviction notice, no offer of compensation, and no notice that a process to buy the land was under way," said Bernardo Caluag, Sabang Poocan Farmer and Fishing Association (SAPOFFA) president.

BARRICADE. Poocan residents form a barricade to stop bulldozing activities reportedly ordered by the mayor

The farmers suspect that the relocation of the 100 families in Sabang is to give way to a waste facility for SMC's 15-megawatt coal-fired power plant in another part of the island. (READ: Court blocks Palawan DMCI coal plant)

A waste tailing pond is a facility in which coal ash – a substance left over after the burning of coal – is dumped and stored. Coal ash may contain hazardous chemicals like arsenic, mercury, and lead, which can seep into soil and contaminate the environment.

"A tailings pond is supposed to act like a filter to extract the harmful tailings from water before the water gets dumped into the sea. But if not built well, the tailings can spill and leak into the environment," said Lory Tan, CEO of Worldwide Fund for Nature Philippines.

Project of the mayor

SMC admitted to Rappler that the bulldozing group was dispatched by their company but they clarified it was the project of the mayor.

"This is a project of the mayor. It will be a relocation area. SMC will help build houses for 130 families," said the assistant administrator who spoke to Rappler on the phone but withheld his name.

When asked if the relocation was to make way for a SMC waste tailings pond, he replied, "I am not the right person to answer that."

However, he said the "joint project" was part of SMC's corporate social responsibility program and that the farmers who live on the land are just squatting.

The waste tailing pond to be built allegedly in Sabang will occupy 3 hectares of land that belongs to the local government of Caluya through a deed of donation by the family that used to own the land. Farmer homes, irrigated rice fields, an elementary school, a Department of Social Welfare and Development daycare center, and the town plaza currently sit on the land.

On Sept 18, 2013, Mayor Lim-Reyes reportedly held a dialogue with locals who live there to persuade them to relocate to give way for the tailings pond.

Mining expansion

BIGGEST PIT. The Panian Mine operated by Semirara Mining Corp is the biggest open-pit coal mine in the Philippines. Image from NASA

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.

SMC was given exclusive rights by the Department of Energy (DOE) to mine coal and conduct explorations in Semirara. Their first Coal Operating Contract (COC) expired in July 2012, but they were able to extend the contract until 2027.

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. Environmentalists all over the country have also critized the government's coal-oriented energy program.

Fishermen and seaweed farmers fear that expansion of coal projects will endanger the marine and land ecosystems in the island which they depend on for their livelihood.

Seaweed farmers, which make up around 30% of the population, are particularly affected.

Farmers say waste from the coal mine that ended up in the surrounding waters of the island has killed many of their carefully tended seaweed plants.

"Seaweed is really interesting because it only survives in clean waters. It's a very good indicator of pollution. As soon as there are any pollutants in the water, it dies or it gets diseased. So there are places in Semirara where people are no longer able to grow seaweed," said Shannon Arnold, Pakisama national fisheries program manager.

Farmers and fishermen report seeing black dust-like particulates in the water ever since the coal pit opened in the 1980s.    source

‘Price control’ mulled on WESM quotes

Manila Bulletinby Myrna Velasco
February 26, 2014

Price control, and not necessarily real prices in the Wholesale Electricity Spot Market (WESM), had been the mechanism being thought out by government so they can bring down electricity rates during the questioned supply months of November and December.

The propounded “price control” and the “cost level” it should be set was reportedly under consideration by the Energy Regulatory Commission (ERC).

When pressed about the issue, ERC Executive Director Francis Saturnino Juan just gave a very careful answer that “it is still under study.”

Other sources from various entities in the energy sector, however, hinted that the ERC is under pressure to bring down the electricity costs on specified supply months because of the assertions on the alleged “zero offers” or withholding of capacity being brandished by Energy Secretary Carlos Jericho L. Petilla in the media.

When asked further if the investigations on the alleged collusion in the power industry had already been completed, sources said “not yet”; hence the price control proposal on WESM prices would not necessarily be anchored on an outcome of any investigation.

Petilla had dropped hints that electricity rates in November and December should have been lower because real competition did not happen on those periods.

He indicated that the Department of Energy (DOE) had its own investigation but never elaborated on the result. And he defers the calculation of the amount to the ERC for those supply months.

When counter-checked even with some WESM sources, the ‘price control’ proposal was acknowledged but they said even ERC is still struggling as to what legal basis such mechanism must be done.

Worries abound that price control impositions without it coming from the result of a probe might give wrong signal to the market and may also dissuade investor confidence. Worse, such might trigger bigger problems in the future if ‘desperate remedies’ will be resorted to by the market or the industry regulator.

It must be noted that the Manila Electric Company (Meralco) has been seeking for a recalculation of the November and December WESM prices noting the anti-competitive market behavior highlighted during the Congressional investigations as well as at the oral arguments in the Supreme Court on its rate hike.

But for the ERC to undertake this, especially for November supply month which covers the December billing of Meralco, it will need to secure first the go-signal of the high court.    source

5MW solar power plant to rise in SouthCot

By Mindanews on February 26 2014 3:27 pm

GENERAL SANTOS CITY (MindaNews / 26 Feb) – The provincial government of South Cotabato has formally endorsed the planned development starting this year of a US$12-million solar power plant project in Surallah town by a foreign-backed renewable energy company.
South Cotabato Gov. Daisy Avance-Fuentes said Wednesday they issued the endorsement to allow NV Vogt Philippines Inc. to begin with the preparations for the development phase of the five-megawatt (MW) solar power plant venture.
She said the project mainly involves the construction and development of an eight-hectare solar farm and power plant facilities in Barangay Centrala in Surallah.
At 5MW, NV Vogt’s planned solar power plant would be the biggest photovoltaic power project in the country once completed, surpassing the 1MW solar facility in Cagayan de Oro City.
Fuentes said the project’s endorsement was based on an earlier recommendation from the Provincial Development Council (PDC), which is the province’s highest development policy-making body.
The PDC, which is chaired by the governor, is composed of the mayors of the province’s 10 towns and lone city, provincial government officials and department heads as well as representatives from accredited non-government organizations in the area.
“We endorsed the project mainly because of the benefits that it will bring, specifically in filling the energy vacuum in the province using the best alternative power from sustainable clean energy,” the governor said in a statement.
Fuentes said they also saw huge potentials with the venture in terms of job generation, increase in local tax revenues, expansion of eco-tourism opportunities and enhancement of local and foreign investors’ confidence to the area.
Considering the massive investment that the company will contribute to the local economy, she said the local government initially offered a 10-year tax exemption to NV Vogt as incentive pending the revision of the province’s revenue code.
She said the provincial government will shoulder the costs of the concreting of three-kilometer road from the national highway leading to the solar farm as additional support for the project.
“We assured them that the province will exert all efforts to provide them with safe, secure and peaceful environment to conduct their business,” Fuentes said.
Aside from its initial US$12-million or roughly P535.49-million investment, the governor said NV Vogt signified to invest an additional US$10 million for the project’s expansion in the next few years.
She said the company committed to later fund the establishment of a training center on solar technology in the province.
NV Vogt is backed financially by the Berlin, Germany-based ib vogt GmbH. Aside from the Philippines, the company has offices in the United Kingdom, Poland, India and Singapore.
The company signed an agreement with South Cotabato I Electric Cooperative (Socoteco I) in June last year for the streaming of power supplies from the facility.
Socoteco I serves this city, eight municipalities in South Cotabato and Lutayan town in Sultan Kudarat.
The electric cooperative signed the supply contract with NV Vogt to provide additional power supplies to the area and cope with shortage caused by the declining capacity of the National Power Corporation’s (NPC) hydropower plants.
In September last year, Socoteco I was forced to implement daily rotational brownouts lasting eight hours due to the reduction of its supply contract with the NPC by 20MW or 12MW less than the area’s daily peak demand of 32MW. source

Meralco scheme to thwart TRO denounced

Manila Times.net
February 26, 2014 12:04 am

by Joel M. Sy Egco Senior Reporter

A former lawmaker on Tuesday scored the Manila Electric Co. (Meralco) for trying to collect its controversial power rate hike despite the temporary restraining order (TRO) issued by the Supreme Court (SC) and said the utility firm should be held accountable.

Former Rep. Teodoro “Teddy” Casiño of Bayan Muna party-list exposed Meralco’s attempt to collect the first tranche of its record P4.15 per kilowatt-hour increase by passing it off as “balance from previous billing.”

“In my monthly bill dated February 13, 2014, there is included a ‘balance from previous billing’ of P173.70 which, although described as ‘deferred, pending resolution of SC temporary restraining order [TRO],’ was added to my total current amount of P2,786.86 making my total amount due P2,960.56,” he narrated.

“When I inquired about this with Meralco’s customer service call center, I was advised to ‘ignore’ the total amount due of P2,960.56 and just pay the total current amount,” Casiño added.

He said his group, People Opposed to Unwarranted Electricity Rates (Power), will ask the SC and the Energy Regulatory Commission (ERC) to stop Meralco from deceiving its customers.

“Such practices should not be allowed and Meralco should be held accountable. We shall file the formal complaints within the week,” he added.

He scored Meralco for putting the rate increase in the bill even if the high court has not lifted its TRO.

“Obviously, Meralco is trying to get around the SC’s TRO by surreptitiously adding the controversial rate hike that should not have been included in the monthly bill in the first place,” Casino said.

“Nagbabakasakaling makalusot ang Meralco [Meralco is trying to get around the rules]. If my wife did not point out the anomaly and I did not bother to check with their customer service, I would have done what most consumers habitually do—simply pay what is in the total amount due portion of the bill,” he added.

Casino claimed the scheme is in violation of the SC order.  source

A year after Pablo: Power supply lack slows down recovery

By Arianne Caryl N. Casas

Wednesday, February 26, 2014

DAVAO Oriental Governor Corazon Malanyaon said the three Typhoon Pablo-hit municipalities need "adequate power supply" to invite investors and bring back economic activity in their areas.

"After all, adequate power supply is one of the major requirements of investors that would ensure economic recovery in these areas," said Provincial Governor Corazon Malanyaon in her situation report delivered during the visit of President Benigno Aquino III in Cateel, Davao Oriental on Monday.

She said a total of 24 out of 42 barangays in the municipalities of Baganga, Cateel and Boston in Davao Oriental have no supply of power yet since the occurrence of Typhoon Pablo on December 4, 2012.

"Communication and power were restored only in town centers and in barangays along the highways," Malanyaon said.

Citing the power situationer provided by the Davao Oriental Electric Cooperative (Doreco), she said power in six out of 18 barangays in Baganga, 12 out of 16 in Cateel, and six out of eight in Boston are yet to be restored.

The three municipalities are the hard hit towns during the occurrence of Typhoon Pablo. 

"It is our hope that the fund request by Doreco from NEA (National Electrification Administration) and the DOE (Department of Energy) would be granted to complete the restoration of energy in all the barangays of the three municipalities and the conversion of the single phase line into three-phase line in selected areas," Malanyaon said.

Aquino, on the other hand, chided his officials for failing to restore power in some areas of the province since Pablo hit the country in December 2012.

In his speech, he said he already communicated with Budget Secretary Florencio Abad, Energy Secretary Jericho Petilla and National Electrification Administration (NEA) Administrator Edita Bueno on the failure to re-energize some villages in the province.

"Tinawagan ko, dahil ako'y nagulat, na bakit mayroong pa palang lugar dito na hindi naibabalik ang kuryente. Tapos ang sagot sa akin, ay mayroong daw ho pending request ang NEA. Sagot ng DBM, "Wala ho sa amin `yang request." Tinatanong ko ngayon ang DOE, "Nasaan ba talaga ang request na `yan?" Buti pa, sa tagal ng beses tinanong ko sa inyo `to, bago ako umalis ng Cateel, kailangan kong masagot ng matino at maayos. At talaga naman ho, alam ho nila na tayo'y bihira ako mawalan ng pasensya, ‘wag sana nilang subukan," he said.

Cateel is among the calamity-stricken towns that Aquino visited in observance of the Edsa Revolution anniversary.  source

Emerging Power eyes Mindoro market

By Iris C. Gonzales (The Philippine Star) | Updated February 26, 2014 - 12:00am

MANILA, Philippines - Local firm Emerging Power Inc. (EPI) is aiming to become the sole supplier of geothermal energy in Mindoro as it inked another power supply agreement (PSA) with Occidental Mindoro Electric Cooperative (Omeco).

Prior to this, EPI has signed an agreement with Oriental Mindoro Electric Co. (Ormeco).

Omeco representative Josephine Ramirez-Sato said with the agreement, the plant would greatly impact on the economy of Mindoro.

“I am confident that with the advent of sustained and stable power generated from a renewable energy source such as geothermal, Occidental Mindoro will finally be on its way to speedy progress,” she said.

The PSAs with Ormeco and Omeco revolve around the construction of EPI’s $180-million Montelago Geothermal Power Plant in Naujan, Oriental Mindoro.

The project would provide 40 megawatts of power to the two cooperatives, with each to be supplied 20 MW of electricity.

Omeco, a cooperative formed in 1974, supplies electricity to nine municipalities of Occidental Mindoro: Mamburao, San Jose, Abra de Ilog, Calintaan, Magsaysay, Paluan, Rizal, Sablayan and Santa Cruz.

For his part, House energy committee chairman and Mindoro Oriental Rep. Reynaldo Umali welcomed EPI’s investment in the province.

“EPI’s move to energize the entire island with geothermal energy will help to make Mindoro the green capital of the Philippines,” he said.

Umali said the project would bring down the cost of electricity in Mindoro by 40 percent to only P6.58 per kilowatt-hour from P11 per kwh.

“What’s more, we will no longer need subsidy from the main grid. This means consumers from other parts of the country do not need to pay for that subsidy. This will also reduce their electric bill,” Umali said.

Sato added that the 40 percent reduction would lead to P2.1 billion in electricity bill savings for the people of Mindoro in four years.

“If we keep investing in coal and oil, consumers will be paying P40 per kilowatt-hour by year 2030, based on estimates of the International Energy Agency and The Economist. In contrast, the Montelago Geothermal Power Plant will stabilize the price over the next 20 years and consumers will only pay a maximum of P7.50 by 2030,” she said.

The Department of Energy earlier granted a geothermal renewable energy service contract to EPI, which expects to drill by the third quarter of this year and will start providing electricity by mid-2016.    source

DOE, NEA rush to restore power in Davao

By Edith Regalado (The Philippine Star) | Updated February 26, 2014 - 12:00am

DAVAO CITY, Philippines – Officials of the Department of Energy (DOE) and the National Electrification Administration (NEA) got back to work yesterday to restore power in typhoon-hit coastal towns in Davao Oriental, a day after President Aquino reprimanded them in public.

The President also called the attention of the Department of Budget and Management to process the funds needed to restore electricity in areas battered by Typhoon Pablo last December. 

Gov. Corazon Malanyaon told The STAR that representatives of DOE, NEA and the Davao Oriental Electric Cooperative immediately proceeded to the affected areas after paying her a courtesy call.

“They promised to restore power in the coastal towns by next month,” Malanyaon said, referring to the municipalities of Cateel, Boston, Baganga and Caraga.

The President gave the orders when he met with the townsfolk in a “Pulong Bayan” held at the Cateel municipal plaza last Monday as part of the EDSA People Power celebration.

Aquino called the attention of Budget Secretary Florencio Abad, Energy Secretary Jericho Petilla and NEA officials, saying he was surprised why power has not been restored in the Pablo-affected towns.

“I called them up and they said the NEA has a pending request (while) the DBM said the request is not with them, and then I called up the DOE. Where really is that request?” he said.    source

Salim brought in zero funds to capture Meralco

Manila TImes.net
February 25, 2014 11:54 pm

by Rigoberto Tiglao

Second of a series on the Salim Empire in the Philippines

ONE compelling economic justification for foreign investments is that a capital-deficient developing country like ours needs capital from abroad, which developed countries with capital-surpluses can provide.

This is not the case, though, in the accumulation of the controlling stocks in Manila Electric Co. by firms controlled by the Indonesian magnate Anthoni Salim.  It is a cautionary tale proving that the presence of foreign business does not necessarily entail capital inflows into the country.

According to publicly available data, Salim’s firms acquired what now makes up the 50 percent controlling stocks of   Meralco —now under the corporate vehicle Beacon Electric Assets Holdings— through the following two main avenues.

First, was a clever, but I would say questionable, scheme that involved the funds of the Beneficial Trust Fund of Philippine Long Distance Telephone Co., the giant telephone firm which Salim also got to control in 1998.

The Fund was used in 2009 to purchase 10 percent of Meralco shares —which made up, as it were, the Indonesian tycoon’s first beachhead in this capture of Meralco.

And second, domestic borrowings, both short- and long-term, from local banks totalling at least P30 billion, financed the rest of the purchase of the Meralco shares, collateralized by those very stocks.

In effect the savings of thousands of Filipinos, both small depositors and corporate investors. financed the acquisition by an Indonesian magnate of our biggest power firm.

PLDT Beneficial Trust Fund

PLDT’s Beneficial Trust Fund in February and March of 2009 had quietly bought Meralco shares totaling for 10 percent of its shares.  To this day, the cost to the Trust Fund of its purchases had not been disclosed, as the price during that period ranged from a low of P90 per share to a high of P123.

However, PLDT’s 2009 reports to the Philippines Securities and Exchange Commission as well as to its US counterpart, did not report the Fund’s purchases of  Meralco shares. The Fund had assets of over P20 billion at that time, accumulated through contributions both by the company and its staff, as required by various agreements with its labor unions and as part of its compensation scheme.

It is run by a board of trustees, which although theoretically independent, has been controlled by PLDT management, which is in turn is appointed by its controlling stockholders—since 1998, Salim’s firms.

The fund’s chairman when it bought the Meralco shares was now Foreign Secretary Albert del Rosario, who had been a board member of the PLDT ever since the Salim Empire got to control it in 1998.  He was also a director of First Pacific, Salim’s flagship for his Asian empire since 2003—even when he was Philippine Ambassador to the US from 2001 to 2006—until 2011, when he was appointed Foreign Affairs Secretary.

“Del Rosario is not MVP’s man, but Salim’s,” an investment banker explained. “He opened the doors in Manila’s business world for MVP, who then was an obscure investment banker in Hong Kong.”

“MVP” is Salim’s chief executive in Manila, the face of his empire here, who chairs most of the Indonesian magnate’s main companies here. “That’s how well connected the Salim Empire here has been,” the banker said.

One of Pangilinan’s top executives, Ray Espinosa, who has been vice chairman of the fund from that time until now, claimed then that the fund’s Meralco shares were merely portfolio investments it bought just like shares of other listed firms.

However, seven months later, in October 2009, Salim’s holding firm in the Philippines, Metro Pacific Investments, bought all of PLDT Beneficial Trust Fund’s Meralco shares, for a purchase price of P14.2 billion, or P126 per share.

But Metro Pacific didn’t pay the pension fund cash.

Metro Pacific swap

Payment was in the form of new shares in Salim’s flagship in the Philippines, Metro Pacific Investments Corp, which it issued and valued at P9.5 billion.  It cannot be determined how much the Fund gained or lost, since it had not disclosed how much it spent in buying the shares in the market early in October.

The Fund though got to turn those shares into cash only a year later, when it sold these in the stock market, in tranches in April and October for a total of P12.9 billion—lower than the P14.2 billion sale price of its Meralco shares.    source