CAGAYAN DE ORO CITY—The National Economic Development Authority (Neda) has recommended the full privatization of the Agus Hydro-Electric Power Plants (HEPPs) to address the power crisis in Mindanao.
The recommendation was one of nine issues and concerns on the Mindanao power situation submitted to President Benigno Simeon C. Aquino III by Neda, according to Ozamiz City Mayor Nova Princess E. Parojinog-Echavez, chair of the Infracom of the Regional Development Council in Northern Mindanao (RDC-10).
“The Neda board has recommended for [the] full privatization [of the Agus HEPPs] to be done on a per power plant basis or split into three subcomplexes to address the concern on having dominant players,” said Jaime H. Pacampara, chief economic development specialist of Neda-10 and Infracom coordinator of RDC-10.
The issue of privatization of the Agus-Pulangi power complexes, located in Lanao del Sur and Bukidnon provinces, is a very contentious and divisive issue that came to the fore during the power crisis in Mindanao in 2009-2010.
The Agus hydropower plant in Lanao del Sur has a total generating capacity of 700 megaWatts (mW) while the Bukidnon-based Pulangi hydropower plant has a generating capacity of 255 mW for a combined total generating capacity of 955 mW.
Both plants supply about 55 percent of the power needs of Mindanao.
But given their antiquated infrastructure, the combined power generation of the two hydropower complexes is currently only about half or even less than their power-generating potential, with Napocor claiming that these plants are now operating at a capacity of only from 200 mW to 300 mW.
Agus’s first unit was constructed in 1953 while the newest one started operation in 1992. Pulangi began operations in 1985.
The power plants’ privatization is in accordance with the Electric Power Industry Reform Act (Epira).
Section 47 of Epira states that 10 years from its passage, power assets may already be sold to private investors. Epira’s 10th year was last June 2011.
But despite this law, many are vehemently against the privatization of the Agus-Pulangi hydropower complexes citing negative impact on electricity prices in Mindanao. Privatization opponents also raised the specter of monopoly after these plants’ privatization.
Instead of privatizing these assets, privatization opponents urged the Aquino administration to rehabilitate them.
Mindanawon Sen. Aquilino “Koko” Pimentel III even urged for an amendment if not outright scrapping of the Epira since it has not benefited the people since its approval.
Pimentel said the Mindanao power crisis is artificially designed to make Mindanawons capitulate to the national government’s desire to privatize the Agus-Pulangi hydropower complexes.
But with Neda’s recommendation to Malacanang, Mindanawons fear the worst, especially since President Aquino has repeatedly called for understanding on why he is for privatization of these power plants.
Aside from privatization of the Agus-Pulangi plants, the Neda also recommended to Aquino to compel the National Power Corp.-Power Sector Assets and Liabilities Management Corp. to purchase power directly from the private producers to come up with a blended rate with hydropower.
However, Neda said instead of reverting back to a monopoly, the distribution utilities should enter into bilateral contracts with generation companies subject to the limits prescribed under Rule 11, Section 5 of the Epira.
It also recommended the privatization and transfer of power barges provided that the private sector agrees to rehabilitate and transfer the PBs and the consumers agree on higher power rates.
Neda also recommended the Leyte-Mindanao Interconnection Project which many are opposing for fear that high power cost in Luzon will be transferred to the Visayas and Mindanao.
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Source: Bong D. Fabe, Business Mirror. (24 September 2012)
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