Beng nixes privatization of Agus hydro power PDF Print E-mail
Saturday, 14 April 2012 13:41

Deputy Speaker and District 1 Representative Maria Isabelle “Beng” Climaco was in Davao City to attend the Mindanao Power Summit with President Benigno Simeon Aquino III and other stakeholders at the Waterfront Insular Hotel. 

Climaco presented in brief the current status of measures taken in Congress and the legislative agenda being pursued by the Mindanao lawmakers in ensuring reliable and sustainable power supply in Mindanao.

Currently, Climaco together with other colleagues in Congress already filed House Resolution No. 2303 that urges Department of Energy Secretary Jose Rene Almendras to implement necessary measures to alleviate the power supply situation in Mindanao and adopted House Resolution No. 823 urging the Power Sector Assets and Liabilities Management (PSALM) Corporation to defer the sale and privatization of the Agus and Pulangi Hydroelectric Plant Complexes in Mindanao.  

HR No. 2303 urges Sec. Almedras to make representation with the Energy Regulatory Commission (ERC) to allow the National Grid Corporation of the Philippines (NGCP) to reduce the required reserve margin from 250 megawatts (MW) to 150MW to enable the NGCP to increase available capacity by 100MW.

The resolution also pursues the selective dredging/flushing of the Pulangi River to bring the Pulangi Hydroelectric Power Plant back to its installed generating capacity and also targets to direct the NPC to conduct further studies on the best alternatives to restore the installed generating capacities of the Agus and Pulangi complexes. It also eyes the deferment of sale of the four remaining power barges and instead rehabilitate and operate the same to provide additional power supply to Mindanao and pursue the construction of the Agus 3 to provide additional 300MW of additional generation capacity.
Climaco on her part believes that government policy on Agus-Pulangi is in limbo. “There is a resolution in the lower house deferring the privatization of these assets but there is no definite policy from government. There should be a declaration that these complexes shall not be privatized for the benefit of the people in Mindanao,” she stated.

“There are many interested investors in power generation in Mindanao but merely wait and see on the government’s policy on Agus-Pulangi. It is not true that continued government ownership would discourage competition. On the other hand, privatization would only be giving market power to a private entity. If left with government without the profit motive, hydropower can blend power rates and mitigate spikes in power prices,” Climaco added.

Climaco presented in the Mindanao Power Summit a proposed legislative measure that would formulate a viable way to operate and maintain the hydropower complexes without sacrificing the interest of the people in Mindanao.

“Our proposal is to set-up a Mindanao Power Company (MinPOW), a government-owned-and-controlled corporation that would own, operate, and control the Agus-Pulangi Hydropwer complexes. The governing body shall be multi-sectoral and its power and functions can be detailed after inputs from the relevant stakeholders. The idea is to have Mindanaoans be responsible for powering Mindanao” attested Climaco.

“We recognize that government has not been the best operator of power plants. However, hydropower plants like the Agus-Pulangi are inherently profitable and my conscience cannot accept the windfall profits end up in the pockets of private corporations. Given the proper set-up, these complexes can be repaired, operated, maintained and improved by government” stated Climaco.

“The problem with the current set-up is that NAPOCOR is legally obligated to turnover its income to PSALM for purposes of paying the debts of the entire Philippine power industry. There is no means to be self sustaining, thus the need for subsidy which is not sustainable” added Climaco.

“MinPOW shall acquire Agus-Pulangi hydropower complexes on similar terms and conditions in a privatization context and its power should be rationed to electric cooperatives and distribution utilities on a pro rata basis to avoid competing with private power generators” she said. 

Climaco further stated that to protect the public and to maintain the Agus-Pulangi as a tool for mitigating prices and the competitive advantage of Mindanao, the price of MinPOW’s electricity shall be regulated. “It shall be subject to the same reasonableness standards as electric cooperatives for its income for operations, maintenance, and capital expenditure to avoid windfall profits without sacrificing its viability. MinPOW shall not be subsidized and shall survive by the viability of its own operations and it can even be a source for a Mindanao Power Crisis Fund,” Climaco emphasized.

Climaco believes that the establishment of Mindanao Power Crisis Fund can be done as part of the power rates that can be charged by MinPOW. “It is more equitable because the fund is born by ratepayers of Mindanao instead of taxpayers nationwide. With the fund, there is no need to wait for funding from the national government the next time there is a power crisis. Let Mindanaoans be responsible for powering Mindanao” concluded Climaco — ChristianOlasiman