DOE backtracks on plan to privatize Agus-Pulangi complex

MANILA, Philippines – Energy Secretary Jose Rene Almendras said the sale of the 982.1 megawatt Agus-Pulangi complex in Mindanao would likely be scrapped.

He said they have decided not to put on the auction block the hydropower plants to ensure the stability of power supply in Mindanao.

“I have already informed PSALM (Power Sector Assets and Liabilities Management Corp.) that we would not sell Agus and Pulangi,” he said.

He said they are currently seeking ways to arrest the sale of the power facilities without having to amend the law.

“I know that we have to go back to JCPC (Joint Congressional Power Commission). I will explain to Congress why we don’t want to do it,” he said.

The DOE chief argued that keeping these hydropower facilities in government’s hands would be more beneficial. He said the right timing for the sale should also be taken into consideration.

“The correct statement is, it’s not yet for sale. We do not want to sell it yet. How long it would be would depend on how soon we would achieve true pricing and make appropriate adjustment to encourage investment,” he said.

Almendras’ predecessor, Jose Ibazeta, earlier said they would be pushing through with the sale of Agus and Pulangi as this has been spelled out under Republic Act 9136 or the Electric Power Industry Reform Act (EPIRA) of 2001.

Under the EPIRA, these two big hydropower complexes should be privatized 10 years after the passage of the law.

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

TUCP noted that PSALM so far sold 12 hydro power plants to private investors and a total of 86 percent of its generating plants, and the Agus-Pulangi hydro complex in Mindanao is next to be sold in 2011, 10 years after the signing of EPIRA. The Agus-Pulangi 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” lamented TUCP Rep. 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-Pulangi.

“The privatization of Agus-Pulangi hydro complex will increase, rather than reduce the power rates in Mindanao” Mendoza explained. –Donnabelle L. Gatdula (The Philippine Star)