PSALM to sell 2 hydro plants

Published by rudy Date posted on April 5, 2010

MANILA, Philippines – The Power Sector Assets and Liabilities Management Corp. (PSALM) will push through with the privatization of the Agus and Pulangui hydroelectric power plants.

Energy Secretary and PSALM vice chairman Jose Ibazeta said under the law, these power facilities should be put on the auction block.

Under the Electric Power Industry Reform Act of 2001, these two big hydro power complexes should be privatized  10 years after the law was passed.

“It is mandated by law. We are only here to carry out that law,” Ibazeta said.

On the issue of water rights, he said the government is also following a protocol that would allow power plants to be run after the drinking water and irrigation have been fully served by the water sources.

“There is a misconception on the use of water and dams on power. We are strictly following the protocol and there would be penalties if these rules will not be followed accordingly,” he said.

The Trade Union Congress of the Philippines (TUCP), the largest workers’ party in the country, had called on all Mindanaons to oppose the proposed sale of the six Agus-Pulangui hydro complexes to private corporations.

TUCP noted that PSALM has so PSALM to… From B-1

far sold 12 hydropower plants to private investors and a total of 86 percent  of its generating plants, and  the Agus-Pulangui hydro complex in Mindanao is next to be sold in 2011. The Agus-Pulangui hydro complex is composed of six power plants and supplies 55 percent of the power needs of Mindanao.

The group said the government made the privatization of utilities like power a national policy in order to foster competition among energy players, improve operational efficiencies of power companies, ensure the constant supply of electricity and reduce power rates. EPIRA also projected lower electricity tariffs because of competition among the new power players.

“All the promises of privatization remain empty promises. What we have now is the emergence of private and powerful monopolies and cartels and increasing electricity tariffs which further bleed our workers and consumers” said TUCP official Raymond D. C. Mendoza

“Ten years after the passage of EPIRA, rates have gone up because instead of competition, we see rent-seeking behavior among the new owners. After years of power privatization, we are still reeling with brownouts and even higher electricity costs” added Mendoza.

The Agus-Pulangui hydro complex is the source of cheaper electricity in Mindanao. Power rates in Mindanao are lower compared to Luzon and Visayas because of Agus-Pulangui.

“The privatization of Agus-Pulangui hydro complex will increase, rather than reduce the power rates in Mindanao” Mendoza explained.

TUCP also raised concern that the shortage of electricity in Luzon as well as the El Niño phenomenon will be used by the government as a pretext to fast-track the privatization of Agus-Pulangui hydro complex.

“The government must not use the El Niño to condition the mind of the people to accept onerous proposals to privatize all other existing power plants. There is no guarantee that if the private companies will run power generation, our electricity problems will be solved” Mendoza insisted.

TUCP warned that transferring control of 55 percent of Mindanao’s power supply to a single corporation would pave the way for price manipulation to the detriment of consumers.

TUCP noted that the “inefficiency” argument against state maintenance of power utilities is backfiring in the face of present brownouts.   “Agus-Pulangui hydro complex is invested with public interest. The people of Mindanao should own its resources. Agus-Pulangui hydro complex must remain in the hands of the government” Mendoza asserted.

TUCP is also calling for EPIRA to be amended to prevent the privatization of Agus-Pulangui and other government-owned power resources.

“We must seriously reconsider the official policy of privatizing state assets. Instead of selling them wholesale, let us use benchmarking to transform them into viable, accountable and transparent national treasures that will secure the interest of workers and consumers” Mendoza said. -Donnabelle L. Gatdula (The Philippine Star)

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