Aquino a poor manager–Osmeña

MANILA, Philippines—A key political ally of President Aquino on Thursday blamed him and Energy Secretary Jericho Petilla for the country’s power supply woes, calling both officials “awful managers.”

Sen. Sergio Osmeña, chair of the Senate committee on energy, also said the decision of the Energy Regulatory Commission (ERC) to void the huge rate increase that Manila Electric Co. (Meralco) imposed after the power shortage in late 2013 was “good politics but bad economics.”

“If we do this again, the investors [who will put up the power plants] will not believe us again anymore. We’re going to have real shortages decades ahead,” Osmeña said.

He said he advised the President to fire Petilla as early as two months ago but that Aquino didn’t heed his counsel.

Osmeña said that while the energy secretary was an able executive, his mind was divided between doing his job and pursuing his political agenda.

“I told the President to fire him [Petilla] two months ago. Because he is not focused,” the senator told reporters.

Asked what the President’s response was, Osmeña said: “Well, first he called a meeting. Then he made me ‘indyan’ [failing to show up at an appointment]. Nothing happened.”

“That’s all right. The thing is, that’s the way he solves things. He would stay with the people he appointed,” said Osmeña, one of the political strategists behind Aquino in the 2010 presidential election.

“You know, like I said, managing is not an easy profession. And he is a very poor manager, we know that. He is a good man, he is an honest man, but he is an awful manager,” he added.

Keeping Petilla

Malacañang is not about to let go of Petilla.

“We respect the views of Senator Osmeña,” President Aquino’s spokesman Herminio Coloma said when asked about his thoughts on Osmeña’s claim that Aquino and Petilla were both good, honest men but “awful managers.”

Coloma denied that the President was even considering firing Petilla.

“The President is entitled to decide on the members of his Cabinet,” he said.

Coloma belied insinuations that the administration was helpless in dealing with the issues and problems besetting the energy sector.

Besides the power rate hike that has been stopped by the high court, the executive branch has yet to resolve the power crisis in Mindanao and speed up the snail-paced restoration of power in disaster areas.

Hard-headed

Osmeña said President Aquino’s hard-headedness might cost him political capital when it was time to endorse his successor in the 2016 elections.

“He will lose his endorsement, much of his endorsement value in 2016,” the senator said.

Pressed who between Aquino and Petilla was an awful manager, Osmeña said “both of them.”

“We would not be having this type of problems now if they were good managers. We really would not. I don’t intervene with them. I never called up the energy secretary, I never asked for favors,” he said.

No planning

Osmeña said there was no planning on the part of the Department of Energy (DOE) when the power shortages in Luzon started on Nov. 11, 2013.

“Let’s forget that he did not do much to prevent the situation from happening, because you cannot say, ‘all this happened all of a sudden.’ You knew three years ago that Malampaya is down for maintenance,” Osmeña said.

He said if he were Petilla he would have told the government-owned Malaya power plant to make an offer on the Wholesale Electricity Spot Market and make available its 600 megawatts of power.

“Nothing like that happened. Why? Super Typhoon Yolanda hit on Nov. 8 and it hit his province,” Osmeña said.

Preoccupied

“So, right away he was diverted. Suddenly he had two huge problems, when he should have taken care of only one big problem that happened because it was under his specific jurisdiction, the Department of Energy,” Osmeña added.

“But no, he was running around in Leyte. Emotionally, I can understand that. But wait a minute, who is running, who is taking care of the energy problem, which is affecting the whole of Luzon?” he said.

CA nod imperiled

Osmeña, who also chairs the committee on energy of the Commission on Appointments, indicated that Petilla’s appointment as energy secretary won’t be confirmed until he showed improvement in his performance.

“I haven’t called a single hearing. And he was appointed one and a half years ago. And I am chair of the committee on energy of the Commission on Appointments,” he said.

“I have been observing him and I don’t like what I see. Not because he is not gifted, he is very intelligent, but because his mind is elsewhere,” Osmeña added.

As for Aquino, Osmeña indicated the President should sometimes accept that he had made a mistake.

“I just hope that … sometimes, you know, when you’re willing to accept that you made a mistake, it’s easier to correct it. I am not saying that the corrections we’ll make will be ideal, but first, you accept that you made a mistake. Then, ‘yes, we will make corrections,’” Osmeña said.

“Right now, there’s not much that is being done,” he added. Coloma said Malacañang understood the viewpoint of some members of the legislature.

“Their main function is to prepare remedial legislation or to initiate legislation that will address problem situations like the energy crisis that, as you rightly pointed out, as early as the middle of 2012 were already addressed in the Mindanao Power Summit, and the President was quite forthright in making the stand of the government known,” Coloma said.

Structural problems

Coloma noted that Mindanao had some “structural problems” even before Aquino came to power.

“We know that more than 50 percent of the load is being carried by 30-year-old hydroelectric power plants that are no longer fully reliable. They break down frequently and are dependent on water supply, which is in turn affected by situations like El Niño,” Coloma said.

Although members of Congress have a “comprehensive view” on the issues surrounding the power sector, “the public should likewise know that there are many stakeholders in the power (sector) … such as distribution utilities,” he said.

According to Coloma, local distribution utilities have problems with power generators. Many of them are heavily indebted to generating companies.

“So there’s a big reluctance to give them additional supply while their distribution utilities have yet to settle their debts. So hopefully these relevant factors should be factored in, too,” he said.

Fix Mindanao power woes

Aquino has directed Petilla to fix Mindanao’s power problems as soon as possible.

“The President directed Petilla to pursue continuing efforts to address the tight power supply situation that was highlighted by the Mindanao-wide power outage that occurred last Feb. 27,” Coloma said at a briefing.

Aquino, who issued the directive in a meeting with Petilla on Monday, also wanted a cogent explanation of the causes of the unexpected breakdown, said Coloma.

On Feb. 27, Mindanao suffered a massive blackout that affected at least 12 of its key cities and provinces. Until now, authorities have yet to pinpoint the cause of the disruption.

“The President also directed the Department of Energy to coordinate with the Department of Science and Technology in monitoring the inquiry into the causes of the unexpected breakdown,” said Coloma.

According to the energy department, the tightness in the Mindanao power supply situation is expected to persist through the summer months of March, April and May.

Additional power capacity

At the meeting with the President, Petilla enumerated three concrete measures to deal with the situation and the corresponding additional capacity to be generated from each measure.

First, the interruptible load program that is expected to generate around 93.71 MW.

“This is the program by which distribution utilities may tap into their generator sets, instead of availing themselves of the system power supply, and they will be compensated for the cost differential through a formula already determined by the ERC,” said Coloma.

“You will notice there that the ERC approved the petition of Davao Light for rules change on cost recovery, and that is why there is a significant gain in (power) capacity,” he said.

Second, the Interim Mindanao Electricity Market (IMEM), which is similar to the Wholesale Electricity Spot Market (WESM).

According to Coloma, the IMEM is a transparency device by which the available supply in a particular grid is made open, so that those that would need additional supply may buy directly from suppliers of power in that market.

He expected this scheme to generate 124 MW.

Third, the Mindanao modular generator set program that is expected to generate 48 MW.
“There’s an executive order enabling the acquisition of modular generator sets,” said Coloma.

Bridging gap

“And with the additional capacity of 265 megawatts that will be generated from these three measures, the DOE hopes to be able to bridge the gap between demand and supply and, thus, lessen the frequency and duration of the rotating brownouts,” Coloma said.

Last week, Coloma admitted that Mindanao’s power woes would not be over anytime soon as full power capacity on the island would come into operation only in 2015 and 2016.

Citing figures of the energy department, Coloma said the current supply in Mindanao was 1,064 MW, against the estimated peak demand of 1,222 MW.

“This explains why there are rotating brownouts at an average of two to three hours, except in Maguindanao province that is currently experiencing up to more than 10 hours of power interruption daily,” he said.

But he assured suffering consumers in Mindanao that the government was “closely monitoring” power projects that would increase power supply in Mindanao by up to 900 MW.

The new power projects include the 200-MW coal-fired plant of the Alsons’ Group and the 300-MW Aboitiz-owned coal-fired plant, which will both come online by 2015.

Another 400-MW coal-fired plant owned by Filinvest will become operational in 2016.

“With 500 MW in 2015 and 400 MW in 2016, there will be an additional 900 MW to address the current power supply requirement, which is around 1,200 MW,” Coloma said. –Michael Lim Ubac, Norman Bordadora, Philippine Daily Inquirer

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