COMMENTARY: Policies and Politics of the Mindanao Power Crisis

PIKIT, North Cotabato (MindaNews/09 May) — I was browsing over my Facebook account one afternoon in May 2014. Some of my Facebook friends and I thought that we can make fun of who’s experiencing the longest brownouts nowadays. Someone posted that in Davao City brownouts occur for as long as 7 and ½ hours (2.5 hours off-peak or between 8 pm and 8 a.m. and 5 hours at peak time or between 8 a.m. and 8 p.m.). She then asked her friends on Facebook to share the brownout durations from their respective areas.

The following are some of the comments shared on that thread:

In Cotabato City, people are experiencing for the first time an 8-hour-brownout distributed in four shifts. It used to be 2 – 3 hours only before or in the early part of this year. In Cagayan de Oro City, brownout takes about 7 and ½ hours rotated in two shifts, that is, from 8am – 3:30 pm in one area and then 3:30pm – 11pm in some other areas.

I thought my son’s experience with brownouts in the First District of North Cotabato would be the time to beat when he told me power is out for most of the day except that they can still use electric fans for 6 – 8 hours to cool down his two sons (aged 6 years and 1 year) from the scorching heat of summer. But someone from Sulu shared in the comments, still in the same thread, that brownout in the island lasts for as long as 20 hours! This was one for the record. Somehow, this gave us a grim picture of the power situation in the Mindanao grid.

When at times the summer heat becomes unbearable to my son’s children, they seek refuge in our home (in the 2nd District of North Cotabato). Brownout in the 2nd District is not as bad as that of the 1st District. The two Districts are the exact opposites with respect to brownout duration. If we in the 2nd District are experiencing 6-hour brownouts, those in the 1st District have electrical power for only 6 hours, according to my son.

North Cotabato, probably, is the only province in the whole of Mindanao where two electric cooperatives operate. This is inconsistent with the one-province-one-cooperative policy of the National Electrification Administration (NEA). Cotabato Electric Cooperative (COTELCO-PALMA) operates in the 1st District while COTELCO Main is responsible for the 2nd District. The 3rd District is commonly served by both cooperatives.

One will wonder why brownout duration in one province is not the same. It will be recalled that COTELCO PALMA had engaged Maguindanao Electric Cooperative (MAGELCO) in one long legal battle (and I think this case has not rested yet) a few years back before it took full control of the assets and facilities of MAGELCO. In one symposium at the Provincial Capitol in Amas, Kidapawan City sometime summer of last year, we were told by the Manager of COTELCO PALMA that collection is still a major problem, especially in the five towns of Maguindanao who share with their transmission lines. This was allegedly aggravated by some fund management issues when the cooperative was still under the watch of MAGELCO. The good Governor, Emmylou Taliño-Mendoza, of North Cotabato had called for this public consultation on the power crisis because, according to her, it has already become a political issue. She was accused by some sectors of not doing anything about the worsening power situation. Apparently, the good Governor was not aware, but yes, politics could be the major culprit in the Mindanao power crisis. Not her politics, though.

On June 8, 2001, Pres. Gloria Macapagal-Arroyo signed into law Republic Act No. 9136 or the Electrical Power Industry Reform Act of 2001 better known as the EPIRA law.
When EPIRA was being crafted, our proud Mindanao congressmen begged off that Mindanao should be exempted from this law. They said “we don’t need this law in Mindanao. Our hydro-powered electricity, which was relatively cheap, will become expensive the moment power generation is privatized.” They were correct at the time and such was the high level of confidence among our Mindanao lawmakers. These lawmakers have chosen to thread temporary convenience and trumped preparedness for the long term future of the power industry. As a result of this, the national government undertook the privatization of power assets of the country with the exception of the generating power assets in Mindanao. However, it privatized the entire grid system in Mindanao and is now part of the National Grid Corporation of the Philippines.
But situations and conditions change over time and power generation is not exempted especially if we consider two things: 1) hydro-power system of generating electricity is run by machines and even with the best maintenance routine these machines will succumb to the wear and tear of time; 2) Because we had begged to be exempted from the EPIRA law there was monopoly in power generation in Mindanao, ergo, the government (or our lawmakers) have effectively scared away investors from the power sector and deprived us of new and additional power generating plants and the benefit of privatization in terms of promoting free competition within and among the power industry. There is growing evidence that the privatization of the hydroelectric power plants in the whole country is working well. With the government being relieved from the task of operating the generating plants, gains in efficiency and in service delivery improvements have become noticeable among the privatized plants in Luzon and the Visayas.

Now, we have to bear the brunt of long power outages because we choose cheap electricity over privatization. Now, PNoy is telling us to pay more if we want a more stable power source. But those who had been used to cheap source of power even maligned the President for that gesture.

There are actually two hypotheses here: 1) Pay more and enjoy an uninterrupted electricity power; and 2) Cheap power by all means. “We can live with long brownouts but please don’t get more from our hard-earned peso.”

On the first hypothesis. What we failed to understand, probably, is there are sectors of society who are willing to pay more if that is the only way to avail of uninterrupted electrical power. These are the people who own big malls, factories and big industries as well as the vast pineapple and banana plantations. These are the people who are prepared to pay more than risk incurring huge losses due to prolonged brownouts. For them, a few peso added per kilowatt-hour is far better than maintaining their own generator sets. If these sectors have to suffer the effects of long power outages let us be prepared to suffer with them in terms of inflation and unemployment.

On the second hypothesis. If there is one thing sure, the present level of brownouts shall become worse, especially with the onset of the “El Niño” phenomenon which was predicted by PAGASA to start in June this year until early next year (2015). If true, this is terrible. I can imagine the damage this climate change phenomenon can do to the agriculture sector (crop production and fishing industry) and the hydro-power system in Mindanao.
Rey Billena, vice-president of the General Santos Chamber of Commerce and Industry, said in a statement that the biggest losers are the General Santos-based canning factories and the deep-sea fishing vessel operators.
He said the power failures are forcing companies to operate their own generators and pay workers even when the factories do not operate because there is no electricity.
In a scenario where power situation is worse, some industries may find a way to survive or cope up while others will simply retrench on labor and production, or worse, close shop- the net result of which would be higher unemployment rate and inflation, which to me is more burdensome and harder on the ordinary Mindanaoan. We just have to make a hard decision here: continuing brownouts and lower power rates, but at the same time risk the possibility of inflation? Or, pay higher power rates to avoid higher prices of goods, services and other commodities.

The long brownouts in Mindanao is not new but we are told to brace up for the worst this time due to the coming long dry spell called the “El Niño” phenomenon. No rain for almost ten months will surely aggravate the already worsening power situation. It will be recalled that in 2012 and 2013 the Mindanao power crisis was quite serious that it was considered as already approaching calamity proportion. The reason for the outage: the demand for power far exceeds existing supply and there was no immediate solution in sight.

What else could have triggered this deteriorating power situation in Mindanao?

In a research paper, Dr. Gerardo Sicat, former Director General of the National Economic Development Authority, blamed the Mindanao power crisis on the following factors:
1. Mindanao’s electricity distribution grid was not connected to the grids of Luzon and Visayas.
2. The base load of power generation for the region was not increased sufficiently.
3. “Snail-paced” decision-making for undertaking approvals; and
4. Privatization of government power plants through the EPIRA law did not push through in Mindanao.
Another culprit is politics, per se. We would recall that among the favorite projects of some of our lawmakers is pushing the rural electrification program of the national government. And because seeing transmission lines laid down in the rural areas is a visible political commodity, it has become one of the favorite projects funded from our lawmakers’ priority development assistance fund (PDAF) more popularly known as “pork barrel”. Indeed, it was good political commodity that suddenly we saw a very aggressive push of this program, and pushed to the limit, I should say.
I am not saying that the lowly folks in the rural areas do not deserve this perk of life but this was better held in abeyance from 2011, when the power crisis was looming, until we are assured of a stable and competitive power generation, which in the eyes of the experts, could be better achieved by the private sector than government. Sound economics dictates that when the commodity is scarce prioritization is the rule of the game. People in the remote areas do not need this electrical power as badly as those in the urban areas.
Development and business would thrive best in an environment of good road networks, efficient communication, industrial peace, and cheap and stable power source. We have more than enough of the first three, though they may not yet be the best, but we are direly wanting of the latter. Our communication system is definitely not among the most efficient in Asia but people think this is already small wonder for them, and so, nobody was complaining.
Until then, when power generation sufficiently matches our demand, the outlook for Mindanao as a land of promise seems bleak.
(MIndaViews is the opinion section of MindaNews. Dr. Maugan B. Mosaid is presently the Municipal Administrator of Pikit in North Cotabato. He is a freelance writer and dedicates himself to climate change advocacy)