Mindanao Stakeholders cautious of DOE retraction of APHC Privatization

Stakeholders in the Mindanao Power Industry are cautiously jubilant over the Department of Energy´s recent decision not to pursue the privatization of the Agus-Pulangi hydroelectric power complex (APHC) as scheduled next year.

During a lull in the government´s August 18 mid-year economic briefing, Energy Secretary Jose Rene Almendras said he has advised the Power Sector Assets and Liabilities Management Corp. (or Psalm, the government agency charged with privatizing the assets of the National Power Corporation under Republic Act 9136 (or the Electric Power Industry Reform Act or Epira) the DOE is not recommending the sale of the APHC.

Almendras said he considers the APHC a vital cog in the solution of the Mindanao power crisis not merely to address supply put also pricing issues. The APHC supplies some 55% of the Mindanao grid´s present rated capacity for power generation.

"While the policy statement from the DOE Secretary is indeed a great accomplishment for all who have been campaigning for non-privatization of Agus-Pulangi, we need to work on the next part of the campaign," said Engr. David Tauli, an outspoken advocate against the privatization of the APHC by June, 2011 as mandated under.

Tauli is a member of the Mindanao Electric Power Alliance (MEPA) and the Northern Mindanao Electric Cooperatives (Normeca) which have both been campaigning hard against the privatization of the APHC. He is the senior vice president for engineering of the Cagayan Electric Power and Light Company (Cepalco).

Almendras admitted DOE still has to seek the Joint Congressional Power Commission (JCPC) approval not to proceed with the APHC privatization as mandated under the Electric Power Industry Reform Act (Epira). He said the delay in the privatization of the APHC would depend on how fast the "true cost" of electricity is attained in Mindanao and if this should lead to the entry of new and expansion investments in the island´s power industry.

"JCPC and the whole 15th Congress should pass a resolution to extend indefinitely (or for at least another ten years) beyond 2011 the exclusion from privatization of the Agus and Pulangi hydro complexes," Tauli added.

The Epira provides that the non-privatization of Agus-Pulangi will be only until June 2011 (ten years after the Epira), after which the Power Sector Assets and Liabilities Management Corporation (PSALM) in consultation with the JCPC will decide on what to do with the hydro plants.

"We should have the policy statement of Sec. Almendras about Agus-Pulangi enshrined in the laws of the land, so that PSALM cannot continue with their intention (which they have not yet renounced) to privatize the Agus and Pulangi hydro plants," Tauli said.

An Iligan-based consumer group which has been actively campaigning against the APHC privatization shares Tauli´s reservations about the DOE declaration.

Engr. Nestor Degoma, chairman of the Lanao Power Consumers Federation (Lapocof) and interim president of PALAG Mindanao said: "We cannot rest on our laurels because the eventual sale of the APHC has not yet been stopped. We will continue our advocacy to stop the planned sale."

Engr. Cerael Donggay, a trustee of the Cagayan de Oro Chamber of Commerce and Industry Foundation, Inc. (Oro Chamber) cautioned stakeholders in the Mindanao power industry not to be complacent about DOE´s backtracking on the APHC privatization.

"Remember, privatization or not, hydro plants do not constitute a solution to Mindanao´s power deficit," Donggay, a former vice president for Mindanao of the National Power Corporation (Napocor) warned. "The greater cause is lack of power in the absence of new power plant capacities to meet the growing of Mindanao Power Demand. The Entry of the 210 megawatt (MW) Steag plant filled only 1/4 of the Potential Demand nurtured since 2001 until 2010."

Donggay said Mindanao should develop as fast as possible renewable, clean, sustainable and indigenous energy resources such as hydro and geothermal not susceptible to the vagaries of the volatile cost of imported energy like coal or bunker fuel.