Aquino open to more dialogue with Mindanao power stakeholders

MANILA, Philippines—President Aquino is willing to conduct further dialogue with the stakeholders in Mindanao’s power industry but on Monday indicated that the entry of the private investors was still the best way to ensure a sustainable and steady supply of electricity on the island.

After sharing the administration’s position of having the private sector take over the power industry in Mindanao during Friday’s energy summit in Davao, Aquino on Monday said he didn’t expect stakeholders to be readily convinced of the government’s plans in just one round of discussions.

Druing the summit, Aquino said the days of cheap electricity in Mindanao were over and that consumers would have to pay “a little more” in exchange for a steady supply of power.

“It’s rather obvious if we just open our minds a little,” the President said when asked if he believes he could convince the many stakeholders opposed to the privatization of power assets in Mindanao.

“That was historical data. They were exempted from the (Energy and Power Industry Reform Act, or Epira). This is the now the situation. How can we change the situation when we won’t change the system that has been in existence for so long?” he added.

The President stressed the need to have the private sector invest in Mindanao’s power industry for a reliable source of electricity.

“If you’re (a private company) you’d have an allowance for depreciation to replace those that would be damaged, also to upgrade. You’d have to reinvest to upgrade and be more efficient,” Aquino said.

Such an allowance would be uncertain if it has to be taken from the national budget, he added.

“There will be a vicious cycle of fearing a rate hike and you won’t have funds for replacements or upgrade. So there will come a time when the installed capacity would drop … There will be less electricity and we’d have to accept electricity at whatever price,” the President said. “And that’s what we’re avoiding.”

The privatization of power assets is one of the provisions in the Epira. The sale of the National Power Corp.’s assets would be used to pay for its multibillion-peso debt while the private sector is expected to ensure an efficient supply of power for the consumers.

Mindanao was exempted from the implementation of the Epira over the past decade due to its high supply of power at the time the law was passed.

Told of the plan by Mindanao leaders to formally submit their opposition to the privatization of the Agus and Pulangi hydroelectric power plants, Aquino said: “I never said that I was totally in favor (of privatization) but there are many plants that were privatized in Luzon. I remember these plants have increased their available capacity beyond their installed capacity.”

He said he would go over an expected manifesto against the privatization of the said hydroelectric power plants. “I will read it. But when I was there, when I saw several governors, none of them told me that,” Aquino said.

“We will see how reasonable their arguments are, then I’m open to discussing it further with them. But … I’m assuming that the Epira is a law presently constructed allows us to further delay the privatization of these NPC assets,” he added.

Aquino said the government is also looking into renewable energy such as solar power but added that he’s certain solar energy would entail a higher cost for consumers.

“Presently, the price of electricity from solar is quite high … It’s not a problem whether we would adopt solar, biomass, etc. With solar, I’m sure there will be a huge increase in the price of electricity,” Aquino said.

“Would the consumers be willing to pay for clean energy?” he added.

The President also stressed that Mindanao’s reliance on hydroelectric power was no longer sustainable because of the changing rainfall patterns in the area.

While coal and oil may be bought to maintain the power supply from power plants fueled by such resources, it isn’t as easy for those powered by water from the dams.

“It isn’t the way with hydro. You can’t open a faucet and we’d already have water in the dam and we could already run the power plant,” he said. “If the dams aren’t replenished by the rains, you’ve no choice but to be sorry.”

Aquino pointed out that there would be decreased rainfall in Mindanao as forecast by the state weather bureau, Pagasa.

Originally posted at 04:00 pm | Monday, April 16,  2012