Outage

I did not quite get Rep. Rufus Rodriguez’s point when he asked the President to declare a state of emergency in Mindanao due to the rotating brownouts.

According to the news reports, my friend Rufus has called on the President to call Congress into a special session. In that projected special session, Congress will give the President emergency powers to deal with the power outages now hitting Mindanao most severely.

Rufus thinks this is an urgent thing to be done in order to avert power outages during next May’s electoral exercise. The congressman from Cagayan de Oro is, by the way, with the opposition.

I am not quite sure if Rufus’ colleagues in the opposition will agree with his proposal about emergency powers. I am sure the President will not ask for those emergency powers the congressman wants given to her.

In 1992, when he assumed the presidency in the midst of devastating power shortages, Fidel Ramos asked Congress for emergency powers to deal with the crisis. Those powers were helpful in enabling the new president to provide incentives in order to encourage investments in the power generation sector. But it took months and years before enough generating capacity was put on stream.

The emergency powers Rodriguez wants given to the President today are to enable her to ensure adequate electricity by May. It is quite too late for that. New generating capacity could not be installed that quickly.

To install new generating capacity, we need to have an energy blueprint. Contracts will have to be negotiated. Financing will have to be arranged for the projects. The grid to which the additional power will be delivered will have to be built. A site for the new plant will have to be prepared. Along with all that, investors will have to seek clearances from local governments and environmental certification from the DENR.

The point here is this: if Rufus wants new generating capacity for Mindanao, he should have worked for that years ago.

To build a large hydroelectric plant, including all the civil works attendant to it, we need about 15 years from the blueprint stage to turnkey. A large oil- or coal-fired plant will need about 5 years to build. Small generators may be procured and installed in a shorter time, but they are terribly inefficient and dirty.

The point here is: if Rufus wants new generating capacity for Mindanao, he should have started working with our energy planners the day he assumed his seat in the House.

In 1992, when we all desperately needed power, the energy investors demanded — and got — take-or-pay guarantees from a hapless government. When our economy was crippled by the complete lack of a strategic energy plan during the Aquino government, we realized that electricity shortage was far more expensive than any lopsided energy contract that could be imagined.

So, painful as the take-or-pay provisions might have been, the Ramos government agreed to them. That was the only way to prevent our national economy from shrinking like a raisin. That was the only way to avert a complete economic collapse, considering that at this time we were also dealing with a massive debt crisis.

There was no other way investors would have come in with their money and their plants, considering the shape our economy was in. It was, in the midst of an economic contraction, very difficult to make projections about rising energy demand.

After the investments came in and the plants were built, however, our politicians went after the take-or-pay provisions agreed to within the framework of emergency powers. Under intense political pressure, the provisions were re-crafted and renegotiated. From a situation where their investments were supposed to be low-risk, the investors who came in good faith suddenly found themselves in a high-risk situation. Some of them sold off their plants and left, disappointed at the policy instability characterizing our government.

Today, even if we arm the President with emergency powers, no investor will likely come in to invest in additional generating capacity. At least, none would come in at the speed with which they responded when we were in a power emergency in 1992.

Today, even if we commit take-or-pay provisions for anyone who would build a power plant in Mindanao, there will likely be no takers. There are limits to how many times we can abuse the good faith of investors.

Sorry, Rufus, there is no reasonable way we could install additional power generating capacity for Mindanao before May. Power plants do not come in convenient plug-and-play kits.

May is the worst month in an El Niño year. It is the hottest and direst month. It is the month at the end of a long drought, just before rains come.

In short, if there are power outages in Mindanao today, those will be longer by May. There are not enough power barges available to quickly cover the generation deficit we now see.

In his speech before the Makati Business Club last Thursday, Gibo Teodoro said we should all agree to put certain things beyond the pale of politicking. Among these, according to the candidate, are strategic plans for our educational system, our national defense, our bilateral agreements and our major infra projects. Strategic energy plans fall within the last category.

We did not manage to do that in the last few years, when strategic national plans were fair game for partisan play. If we lack energy today, it is because of that.

The situation cannot be cured, at this late stage, by dumping the problem on the President’s lap and by asking her to solve a complicated problem in a matter of weeks. That is simply unfair. –Alex Magno (The Philippine Star)