Stop-gap Noy solution to power woe means higher Mindanao rates

Power consumers in Mindanao will have to bear electricity rates that are higher by as much as 50 centavos per kilowatthour with the government’s plan to use power barges which uses expensive fuel as a stop-gap solution to the brewing power crisis in the region, Sen. Sergio Osmeña III said yesterday.

“The people of Mindanao have to accept that they will have to face higher rates, a little bit higher, by about 50 centavos,” Osmeña said, noting the need to adjust the current P3.70 per kilowatt hour (kwh) to P4.20 per kwh to address the power supply problem immediately.

Besides the impending rate increase, the chairman of the Senate energy committee, also said that the possible solution for the meantime to plug the power supply shortage in Mindanao could be answered by the so-called combined cycle gar turbine (CCGP).

The power barges are designed for emergency uses, which is what Mindanao needs at the moment, Osmeña said.

“Now that they need emergency power supply, it’s like they’re

in ICU (intensive care unit) already, they will have to make do first, temporarily for about two years, with CCGP of about P9 per kwh. But that will only take up about 10-percent of their consumption,” he said.

“So, if it is blended with the average rate, it will go up from about P3.70/kwh to P4.20/kwh. And they are always complaining. But we cannot do anything about it now. They want (the government to) subsidize but those in Luzon and the Visayas are no longer being subsidized,” Osmeña added.

“These are barges that you will use for one to two hours, not more than four hours, a day. That’s because they are expensive. But if you’re only using it for two to four hours a day, you have to blend it with the regular rate and you will see in your bill the average that you pay per kilowatt hour, which will come out to about P4.20 if you use them. If not, they are about P3.70/kwh because there are diesel plants there. The cheapest there is P2.90/kwh, water is hydro, that comes from Angus at Pulangi (power plants). ‘What they use as coal and diesel, the price has gone up to P3.70/kwh which is the average,” he explained.

The senator, who is also co-chairman of the Congressional Commission overseeing implementation of the Electric Power Industry Reform Act (Epira), said the increase in rates would not be so high had there been coal plants in Mindanao shortly after the law was put into place more than a decade ago.

He pointed out that when the Epira was enacted into law, the government scrapped the per grid subsidy.

“Before the Epira, those in Manila subsidize the rest of Luzon. There is an add-on in the bills of about 24 centavos. The rest of Luzon, in turn, subsidizes the rest of Visayas and Mindanao. This was removed to pave the way for competition and true cost of power to reflect in the power bills,” he said.

It is for this reason that during his senatorial campaign in 2010, he had repeatedly warned concerned officials of Mindanao of the looming power crisis in the island.

The senator said that during the term of President Fidel Ramos, Congress passed the Emergency Power Crisis Act allowing the government to contract for new plants without bidding. “We had a problem then because the contracts were over-priced and double ordered at the same time. So, the Philippine economy received a double whammy, then we had a controversy over the purchase power cost, IPPs — independent power plants, which we have to pay for even if we don’t use it.”

He said that in Mindanao, because government still owns about 60 percent to 70 percent of the total output, supply problem will still set in.”

“The power industry has to be planned 10 to 20 years in advance. It takes 3 to 5 years to build a plant. From concept, land preparation, getting all the permits, signing up the contract, getting financing and construction. But now that there is a real power shortage as he warned earlier, Osmeña said the people of Mindanao are blaming the government.

Malacañang, meanwhile, debunked reports that a bigger power crisis is expected to hit Luzon within the next two years if the Aquino administration continues to vacillate on the needed policies to meet rising power demand.

According to deputy presidential spokesman Abigail Valte, the Department of Energy has reported an “average excess supply of 2000 megawatts (MW) in Luzon even at peak hours.”

“Visayas is able to export 200-plus MW to Luzon if required for augmentation,” Valte said.

She likewise pointed out that the DoE is expecting committed capacities in Luzon to come online at the end of the year.

“DoE has also approved around 2000 MW of hydro power service contracts and continues to process renewable energy project applications which will go online as per work program commitments at different periods,” Valte reported.

Bayan Muna Rep. Teddy Casiño also is proposing a novel solution to the Mindanao power shortage and the impending power crisis in Luzon – build a million solar powered roofs in 10 years.

Casiño, author of House Bill 5405 or the proposed One Million Solar Roofs Act, said that Congress should fast track the bill which provides incentives and financing facilities to ordinary electricity consumers like residences, offices and small to medium business establishments who want to put up their own solar power systems.

Casiño’s bill will allow homeowners and entrepreneurs to take out loans from Pag-Ibig, GSIS, SSS and other financial institutions to purchase solar panels and pay the amount from the ensuing savings in their electricity bills.

“In this way, we hit three birds with one stone – we build additional supply of power; liberate ourselves from expensive, dirty and imported fossil fuels; and develop the local renewable energy industry. It is really the way to go,” he said.

According to the lawmaker, “Government should think out of the box and go beyond the big developer mentality in dealing with the power crisis. Solar power technology now allows electricity consumers to be producers themselves. So rather than giving the President emergency powers to ink sweetheart contracts again with the big players, why not empower consumers to produce their own energy through solar power? “

“Our bill also allows these solar powered households and small firms to feed in their unused power to the grid during peak midday hours at a cost cheaper than existing diesel peaking plants. In the National Capital Region (NCR), some peaking plants sell at as high as P30/kWh while solar can come in at half that price,” Casiño revealed. Angie M. Rosales, Charlie V. Manalo, Rocky Nazareno, Daily Tribune