Review, amend Epira

PLDT not only stands for the country’s biggest phone company, said Ariel Ayala of Radio Veritas on Saturday.

Commenting on the ongoing discussion on the power shortage at the Kapihan sa Sulo, Ayala said the acronym should also refer to the government’s economic policies: privatization, liberalization, deregulation and tariff reduction.

From the particulars of the outages that have hit the archipelago, talk at the forum shifted to general economic concepts, which at least one official indicated are at the root of the country’s current woes.

From the purveyors of PLDT came the idea of restructuring the electric power industry, which for decades had been dominated by the state-owned National Power Corp. (Napocor). Their incessant lobbying resulted in the so-called Electric Power Industry Reform Act (Epira).

Epira was enacted in President Arroyo’s first year in office, but it had in fact been promoted by the PLDT clique from as far back as the Ramos administration, and perhaps earlier.

The basic idea behind Epira is that the state should get out of power-generation and, for that matter, other businesses as well. Theirs was an economic philosophy that was diametrically opposed to the central planning that had become fashionable in many developing countries after World War II.

Numerous instances of inefficiency and graft in Napocor and similar state agencies persuaded Congress to grant the Epira bill its seal of approval—raising hopes of improved service and greater capacity.

There was even the promise of lower electric bills for household, commercial and industrial consumers, which was a welcome prospect indeed in a country that had Asia’s highest power rates, second only to resource-poor Japan.

Never happened.

True, the government’s power assets were gobbled up by private companies. The sales, in turn, generated massive revenue that allowed the administration of President Arroyo to solve a portion of its perennial budgetary deficit.

But the promises of improved efficiency, greater capacity and lower rates have yet to see fulfillment. Instead, El Niño unveiled the false expectations from Epira. A short dry spell was all it took to reveal that the benefits from PLDT amounted to little more than an empty slogan.

Take the case of the country’s second largest island. Over the past weeks, Mindanao has been experiencing outages extending from eight to 12 hours daily on weekdays.

Speaking at the Kapihan, Napocor spokesman Dennis Gana reported that Mindanao had a power deficit of 750 megawatts, which is more than the rated capacity of the Masinloc power plant in Zambales, one of the biggest facilities of its kind in the Philippines.

After some needling from forum regulars, Gana acknowledged that Epira needed to undergo thorough review by Congress.

“Privatization aimed to attract more investors to the power sector,” Gana said. “But the investments did not come in. For one thing, potential investors found the prevailing power rates too low for their bottom line.”

In Mindanao also, reports of insurgent activity turned off possible domestic and overseas investors. Not once have transmission lines and towers been blown up by Moro separatists and other malcontents, who have also been known to resort to kidnapping for ransom.

The looming power shortage escaped notice for two years following the global financial crisis, which reduced economic activity. But when business began to pick up again—not to mention population growth—generating capacity could not keep up with demand.

But even before the proposal to subject Epira to an honest-to-goodness review could gain ground, other quarters have begun to advance several weird proposals.

For instance, an energy undersecretary has been pressing for the construction of more coal-fired plants, although such facilities are extremely expensive, totally dependent on imported fuel and demonstrably unsafe to the environment.

Also, two nominally oppositionist congressmen—Ferdinand Marcos Jr. of Ilocos Norte and Mark Cojuangco of Pangasinan—are proposing to adopt nuclear technology to meet the country’s mounting energy demand.

Another opposition leader, however, has nixed the Marcos-Cojuangco proposition.

In a press statement, Senate Minority Leader Aquilino Pi-mentel Jr. said the Philippines should focus on developing renewable energy sources, which abound in the country, instead of reviving the potentially-dangerous nuclear power plant in Bataan.

Built at the cost of over $2 billion, the Bataan nuclear plant was never allowed to go into operation due to major safety concerns. For one thing, the plant sits atop an active volcano and an earthquake fault. For another, its proponents have yet to answer questions how to dispose of its radioactive wastes safely.

Pimentel said the government and private sector should pour their limited resources on the alternative, indigenous energy sources like solar, wind, sea wave, bio-mass, geothermal and bio-ethanol.

“The development of these renewable energy sources will initially entail huge capital investments,” Pimentel said. “But once the physical infrastructures like generating and transmission facilities and processing plants are completed, they will produce power at a much lower cost.”

At least one company is responding to the need for additional power in a way that seems to suit the criteria enumerated by Pimentel and other quarters.

Energy Development Corporation—a former subsidiary of the Philippine National Oil Co. that was privatized in 2007—is reportedly targeting to increase its geothermal capacity by another 300 MW, which could make it the world’s biggest producer of geothermal energy.

For years, experts have been pointing out that the country—which lies in the so-called Pacific Rim of Fire—has more than enough geothermal resources to meet its growing need for electricity.

Unfortunately, over the same period the government and private investors—save for companies like EDC—have not given underground steam, which is an indigenous, renewable and clean energy source, enough attention.

Of course, geothermal power does not provide the same opportunities for under-the-table deals that accompany contracts for constructing, say, nuclear power plants or for importing coal for thermal plants.

As media forum kibitzers might remark: “Aha!” –DAN MARIANO, Manila Times

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