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 POWER.ENERGY.FUEL

Noynoy allies reaping gains from ‘power crisis’

• Written by  Paul Atienza

The Aboitiz and Alcantare families are long allies of the family of President Aquino. The state firm National Power Corp.’s (Napocor) president was Ernesto Aboitiz during the term of President Cory Aquino, the incumbent’s mother. Cory Aquino abolished the Ministry of Energy (MoE) on the mere reason that it was first created by former President Ferdinand Marcos, making Napocor then the policy-making agency of the government.
That was when 12-hour daily brownouts hit Luzon as a result of the failure of Cory Aquino’s to plan ahead in terms of power supply.
At least 15 distribution utilities and cooperatives in Mindanao have signed contract with AboitizPower to obtain power from its coal-fired power plant.
The Mindanao utility firms have contracted 180 megawatts or more than 50 percent of the total capacity of Aboitiz unit Therma South Inc.’s (TSI) 300 megawatt (MW) coal-fired power plant now being constructed in Toril, Davao City. TSI’s coal plant will go online in mid-2015.
“These contracts have been submitted to the Energy Regulatory Commission for review. And we are awaiting the ERC’s decision,” an AboitizPower official said.
The Cotabato Electric Cooperative (Cotelco) which covers six towns in North Cotabato, has also signed an energy supply agreement with Therma South Inc. Under the contract, the Cotelco P-Palma Area will purchase 5MW of power from the 300-MW circulating-fluidized bed coal plant in Toril district.
Also among distribution utilities that contracted power from TSI’s coal plant are AboitizPower subsidiaries Davao Light and Power Co., and Cotabato Light and Power Co.
Electric cooperatives Surigao del Sur, Electric Cooperative II, Misamis Occidental 1 Electric Cooperative, Cotabato Electric Cooperative and Sultan Kudarat Electric Cooperative, the PNA learned.
Hedcor Sibulan Inc. (HSI), which is also an Aboitiz unit, got approval for government incentives for the Tudaya 1 Hydroelectric Power Plant in Sta. Cruz, Davao del Sur.
This is the third hydro plant of HSI after Sibulan Plant A and Plant B which produces a combined capacity of 42.5 MW.
During the 16th annual Mindanao Business Conference held at KCC Mall Gensan, Alsons Consolidated Resources president Tomas Alcantara also announced they were going to build a coal-fired power plant with a capacity reaching up to 900MW in Sarangani to meet projected increase in demand for power supply and in anticipation then to the projectedpower crisis that will hit the island by 2011 — when supply will no longer be adequate to meet demand in Mindanao.
Most electric cooperatives then were also gearing up and anticipating the full privatization of all remaining assets of Napocor, including the sale of the Agus and Pulangi hydroelectric plants.
Socoteco 2’s contract with Napocor expired in 2011. Napocor had earlier sold two power barges moored in Mindanao, Power barge 117 and 118, which have a combined capacity of 100MW and decommissioned its 56MW diesel plant in General Santos.
In 2009, Socoteco announced it is opening bid for the supply of additional capacity in anticipation to increase in local demand for power.
Unfortunately, there were only two bidders at the time which, under its charter and ERC rules, resulted in failed bidding.
The bidders then were only Agus 3 and Conal Holdings Corporation, the power holdings company of Alsons Consolidated Resources.
Both offered to supply base load capacity for indicative projects. Agus 3 is an erstwhile hydroelectric power plant project of Napocor but was mothballed as it required inundating villages for the construction of a dam.
A group of private investors is now pursuing the project, the application of which was referred to Power Sector Assets and Liabilities Management Corp. (Psalm). Psalm manages all remaining generating assets of Napocor as mandated by the Electric Power Industry Reform Act (Epira) or RA 9136.
President Aquino, meanwhile, reiterated his position that the power crisis in Mindanao has been undergoing study while stressing that the power problem would be resolved when the power plants of his allies go online in 2015.
The pestering power crisis in Mindanao was attributed to the decreased in generating capacity of hydropower plants caused by the reduced water level in Lake Lanao.
Based on the Philippine Development Energy Plan 2012-2030, the Mindanao grid will need an additional capacity of 2,188 MW by 2030.
“The initial plan is to fix the mechanism. By 2015, those coal power plants would be online, for instance, the Aboitiz. But 2013 up to 2015, we will put up diesel power plants that will generate power,” Aquino said.
Aquino said that the temporary use of diesel power plants has been considered to be an alternative to remedy the present situation in Mindanao power problem.
“The problem on diesel is expensive. But this is only interim. After we have used this in the entire Mindanao, the power would then be transferred to the SPUG (small power utilities group). This will be the next step. The national government wold provide funds,” Aquino said.
The generators will augment demand for power in Mindanao at least until 2015 when new power plants are expected to start their operations.
Aquino stressed the need to first fine-tune the mechanism before purchasing the generators since under the Electric Power Industry Reform Act, the government is prohibited to buy additional generating capacity.
“There is a provision on the Epira Law prohibiting to purchase the Napocor (National Power Corp.). That is being studied. But what is the mechanism? Who is authorized to purchase to ease up the power shortage? There is the funds,” Aquino said.
Aquino said the mechanism should fall within the purview of the law. He said he wants to make sure that government actions complies with the law.
Aquino told the local leaders that the government provides a subsidy for Palawan and Mindoro areas where SPUG services are needed.
“Now, those were subsidized. But in Mindoro when their wind and hydro and a geothermal that is being looked into, they would be detached from the SPUG. Maybe they can be independent already, even they can have surplus to export. Between Mindoro and Palawan, when they detached from the SPUG, 50 percent of their expenses on missionary roots is also removed,” Aquino said.
Aquino also expressed concern over the proposal to rely solely on the SPUG for power supply.
“This SPUG is also a problem there, besides, the generating sets are too old. It is as if in the maintenance alone there is losses,” Aquino said.
Aquino also wooed hundreds of residents in Buluan, Maguindanao province, Autonomous Region in Muslim Mindanao to vote for the administration candidates with promises of reforms in the election fraud ridden areas.
“In the righteous path, we have proven the possibility to have a kind of government that cares and honest, where there is possible equality and good opportunity, whether in Luzon, Visayas, or in Mindanao,” Aquino said.

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2 comments

• 
  Geez it was all planned.Noynoy had been informed of the looming crisis almost 2 yrs ago and no actions has been done.Looked who are the people benefited from it,are they not allies of the Aquinos?Tamaan sana sila ng cancer for taking advantage of the situation.They're all greedy...don't we ever noticed?our sufferings started when the first Aquino rose to power.They are much worst than what Marcos have done to us and they always blame him at every opportunity when everything goes wrong.The Aquinos are like a curse that will never go away...
  Starbright Saturday, 13 April 2013 20:39 Comment Link
• 
  Dear Mr. Atienza,
  Nice article. Just a few questions.
  '12-hour daily brownouts hit Luzon as a result of the failure of Cory Aquino’s (administration) to plan ahead in terms of power supply.'
  1. Did you miss the 'administration' in your article?
  2. Do you really think that Cory Aquino's administration failed to plan ahead that time? Or was the power crisis planned ahead that time to further enrich those in power?
  3. Is it possible that today's power crisis was also planned ahead for the same reason as in #2?
  4. Were not the Lopezes of Meralco and the Aboitizes close friends of the Aquinos since the time of the dictator?
  Thank you.