Privatization raises fear of power shortage
Western Visayas officials and consumer groups have called for the deferment of the transfer of power plants in Panay to a Singaporean firm this month and raised alarm over the possibility of a massive power shortage or higher power rates.
Presidential Assistant for Western Visayas Raul Banias, Iloilo Gov. Niel Tupas Sr. and Iloilo City Mayor Jerry Treñas will seek the intervention of President Macapagal-Arroyo to delay the turn-over of two power plants to SPC Island Power Corp. (SIPC), formerly the Salcon Power Corp., set on March 25.
In a resolution passed during its regular meeting on Friday, the Infrastructure Development Committee of the Regional Development Council of Western Visayas pushed for the deferment of the transfer of the plants and for its continued operation by the National Power Corp. (Napocor).
Treñas, committee chair, said they will ask the President to allow the Napocor to continue operating the Panay Power Diesel Plant (PPDP) 1 and PPDP 2 until a new power supply contract between the SIPC and power distributors is approved by the Energy Regulatory Commission (ERC).
The two power plants with a total capacity of 146.5 megawatts and a dependable capacity of 103 mw were acquired by SIPC for US$ 5.86 million in November last year in a package that included 22-mw diesel power plants in Bohol.
The two power plants in Panay account for the bulk of the 121 mw power generated on the island. The Napocor is currently supplying the bulk of the supply needs of the seven electric cooperatives in Antique, Aklan, Capiz, Guimaras and Iloilo.
Banias said they are concerned that the SIPC will discontinue supplying the electric cooperatives unless a new power supply agreement with a higher rate than existing Napocor-subsidized rate can be reached.
ERC Commissioner Jose Reyes said during the meeting that it would take at least 75 days for the ERC to approve an application for a power supply agreement.
The officials said an additional power deficit will worsen the situation in Panay and the rest of the Visayas grid which is already experiencing brownouts and low voltage because of supply problems.
The peak demand on Panay Island as of this month reaches 210 mw but the dependable capacity from power plants on the island reaches only 121 mw, said Raul Galano of the National Grid Power Corp. (NGPC) in a briefing at the RDC meeting.
The 89-mw deficit is being supplied by the Cebu-Negros-Panay grid which gets its supply from the geothermal plants in Leyte and from the Luzon grid.
Napocor Vice President for Visayas operations Danilo Sevilla said power distributors would need to purchase power directly from Salcon at an agreed rate because the Napocor is not allowed to purchase from an independent power provider and sell it at a subsidized rate to distributors.
Treñas and Tupas castigated Napocor and Department of Energy officials for failing to institute measures to avert a power crisis before the turn over of the power plants.
Tupas threatened to file charges for breach of contract against Napocor because their existing power supply contract with electric cooperatives in Panay stipulates that it will supply the power distributors until 2010.
Militant groups led by the Bagong Alyansang Makabayan (Bayan) held a protest in front of the National Economic and Development Authority building where the meeting was held.
Bayan-Panay spokesperson Edgar Pelayo scored the government's program of privatizing the power industry as the cause of the crisis.
“The privatization of the Panay Power Diesel Plants and other state-run power plants is a outright sell-out of the people's interest. This will translate to high power rates,” Pelayo said in a statement.
Bayan called on the government to declare a moratorium on the sale of Napocor-owned power plants and to scrap the Electric Power Industry Reform Act (Epira).