Agus, Pulangi hydropower plants not yet for sale, says energy chief

THE sale of the 982.1-megawatt Agus and Pulangi hydropower complex might not push through as originally envisioned in the Electric Power Industry Reform Act (Epira), as the Department of Energy (DOE) is looking to use the power plant to balance the interests of consumers and potential investors in Mindanao’s power-generation sector.

“I’ve made it known that I’m not eager to sell Agus and Pulangi hydropower complex. Part of the solution to Mindanao’s power situation is the appropriate use of those hydropower plants not just for supplying electricity, but also in a pricing equation to manage the shifting to the true cost of power,” Energy Secretary Jose Rene Almendras told reporters at the sidelines of the midyear Economic Managers Briefing.

Industry stakeholders have earlier suggested that the government maintain the Agus and Pulangi plants to subsidize prices in Mindanao and put in place the right pricing for the private power generators to eventually come up with a lower blended rate.

“I’ve already informed the Power Sector Assets and Liabilities Management Corp. [PSALM] that we would like to recommend that we will not sell the Agus-Pulangi. I know that we would also have to go back to the Joint Congressional Power Commission [JCPC] for their conferment, and I’m ready for that. So hopefully, Congress gives us and I would have to explain to Congress why we don’t want to do it,” the Energy chief said.

When sought for clarification whether the government will defer or no longer sell the power plant, Almendras made it clear that the Agus-Pulangi hydropower complex is not yet for sale.

“We don’t want to sell it yet. How long that will be will depend on how soon we can achieve true pricing and make the appropriate adjustments to fall to encourage investors,” he added.

Under the Epira, the Agus-Pulangi hydropower complex should be privatized 10 years after the law’s passage.

The Trade Union Congress Party (TUCP) earlier urged all Mindanaoans to oppose the proposed sale of the six Agus-Pulangi hydro complexes to private corporations. TUCP noted that Psalm so far sold 12 hydropower plants to private investors and a total of 86 percent of its generating plants.

Psalm had originally scheduled to sell the Agus-Pulangi hydro complex in Mindanao next year. The Agus-Pulangi hydro complex is composed of six power plants and supplies 55 percent of the power needs of Mindanao.

TUCP noted that privatization of power-generating assets was deemed to foster competition among energy players, improve operational efficiencies of power companies, ensure the constant supply of electricity and reduce power rates.

“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” TUCP Rep. Raymond Mendoza said.

He pointed out that rates have gone up because instead of competition, new owners of the power plants adopted a rent-seeking behavior.  “After years of power privatization, we are still reeling with brownouts and even higher electricity costs,” Mendoza said.

The Agus-Pulangui hydro complex is the source of cheaper electricity in Mindanao. Power rates in Mindanao are lower compared with Luzon and the Visayas because of Agus-Pulangi. “The privatization of Agus-Pulangi hydro complex will increase power rates instead of reducing them,” Mendoza said. –Paul Anthony A. Isla / Reporter, Businessmirror