The Agus-Pulangi Hydroelectric Complex is best left in government hands rather than sold to private investors.
This was emphatically stressed by Secretary Emmanuel F. Piñol., chairman of the Mindanao Development Authority (MinDA) during the recent virtual Mindanao Power Forum 2021 held on May 25, 2021.
“I fully support the previous policy recommendation of MinDA for APHEC (Agus Pulangi Hydroelectric Complex) to remain under the ownership and control of government. This is also my personal position as current Chairman of MinDA,” Piñol said in a reply to various question posted in the event chatroom inquiring about MinDa’s stand whether or not to privatize the complex.
Power consumer groups in Mindanao and local government units have been vigorously opposing the national government’s planned privation of the Agus-Pulangi Hydroelectric Complex.
“For several years now there has been going on sub-rosa at the Department of Energy (DOE) a program to bring about the privatization of the APHEC,” said Engr. David A. Tauli, consultant of the Lanao Power Consumers Federation (LAPOCOF).
“This program at the DOE has been fueled, in my opinion, by resources and persuasion from the privately-owned generating companies in Mindanao, who are the only parties that will profit from the privatization of the APHEC,” Tauli stressed in a paper released immediately after the forum to spread awareness among consumers about what the government agencies are doing (and not doing) concerning the electric power industry in Mindanao, as well as the things that the distribution utilities have been doing (or not doing) that have resulted in the high price of electricity in Mindanao.
Tauli recently also authored another paper for the Institute for Power Sector Economics (IPSEc) of the University of Science and Technology of Southern Philippines (USTP) titled “Causes of High Prices of Electricity in Mindanao, and How Consumer Groups Can Help to Bring Down the Prices”.
“It is important to power consumers that the MinDA will be supporting the campaign of power consumers against the privatization of the existing hydroelectric power plants on the Agus and Pulangi rivers as well as the other power plants owned by the government, Tuali stressed.
He said main reason for consumers overwhelming opposition to the privatization of the APHEC and other generating plants of the PSALM-NPC is that it will increase the rates of the privatized generation plants by at least P2.00 per kilowatt-hour (kWh), and more likely by P3.00 per kWh.
“The best evidence that can be presented of that happening is the privatization of the IPP Administration contract for the Mt. Apo geothermal power plants (MAGPP). Before privatization, the MAGPP was charging the DUs a generation rate of only P2.80 pesos per kWh. After privatization, the rate of the MAGPP instantly went up to P5.18 pesos per kWh, an 85% increase!”
There were comments and questions raised at the chatroom during the Forum on the long-delayed rehabilitation of the hydroelectric power plants on the Agus and Pulangi rivers, and also on the increase in rates that consumers are paying because the PSALM has been ordering the waters of the Pulangi 4 (P4) hydroelectric power plant to be dumped so that it could provide ancillary services for the Mindanao Grid.
“I have not estimated the increase in rates of consumers due to spillage of P4, but following below are my estimates of the losses in revenues of PSALM due to (a) not rehabilitating the Agus HPPs, and (b) spillage of water from the P4 HPP.
Total losses of PSALM in the period 2015-20 due to reduced generation of the Agus HPPs were estimated at P25,600,000,000.00, while total losses of PSALM in the period 2015 to 2020 due to spillage of water from the Pulangi 4 HPP was estimated at P8,500,000,000.00 or a whopping P34,100,000,000.00 losses for the period 2015-2020 for the two hydroelectric plants.
“Note that the National Power Corporation (NPC) has estimated that the rehab of the APHEC will cost P20-billion pesos. The losses of the PSALM from the Agus HPPs alone (i.e., P25.6-B) would have already been sufficient to cover the cost of rehabilitating the APHEC,” Tauli pointed out.
The longer PSALM delays the rehabilitation of the APHEC the greater the losses to the government of the Philippines. Consumer advocates have long suspected that the only reason PSALM has been delaying the rehabilitation of the APHEC is to enable the hydro plants to be sold cheaply to the generating companies when the APHEC is privatized.
The Mindanao Power Forum 2021 was organized by MinDA and attended by around 500 people in-person at the venue and online via Zoom.
With the theme, “Building Back Better Mindanao: A Sustainable and more Resilient Power Landscape”. the Forum sought to assess the impacts of Covid-19 on Mindanao’s power generation, transmission and distribution, and discuss what the government had been doing, and propose to do, to address the problems of the electric power industry in Mindanao resulting from the pandemic.
The Forum also showcased the initiatives of MinDA in the development of renewable energy resources in Mindanao.
However, Tauli noted how consumer groups, civil service organization, and non-government organizations were woefully underrepresented in attendance hence the publication of his paper for their benefit and information.
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