Bukidnon Power Commission: “we’ll buy Pulangui IV”

MALAYBALAY CITY (MindaNews/14 August) —  Bukidnon’s electric power cooperatives and local government units are supporting the “immediate privatization” of the 255-MW Pulangui IV Hydroelectric Plant in Maramag town and will form a corporation to buy it.

In a resolution sent to the Power Sector Assets and Liabilities Management Corporation (PSALM), the Bukidnon Power Commission (BPC) said it supports the “immediate privatization and endorses the acquisition of Pulangi IV by registered distribution utilities in the Province of Bukidnon and relentlessly pursues all available legal and peaceful means.” The resolution was passed on August 11 at the 2nd Bukidnon Power Summit.

The present position of the BPC veers away from the group’s original stand to oppose privatization of the power plant, said Edgardo Masongsong, general manager of the Bukidnon Second Electric Cooperative general manager, and president of the Amreco Power Supply Aggregation Group (PSAG) Corporation.

But he clarified in a telephone interview that that 21-member Association of Mindanao Electric Cooperatives (AMRECO) has remained opposed to the privatization.

Masongsong said BPC is now pushing for privatization and a negotiated sale to a corporation the Bukidnon stakeholders will form, with the suggested name, “Bukidnon Power Corporation.”

The Bukidnon Power Commission, created by Governor Alex Calingasan in March 2011 as an offshoot of the 1st Bukidnon Power Summit two months earlier,  is composed of the electric cooperatives and the local government units in Bukidnon.

“Bukidnon stakeholders shall be accorded the right of first refusal in the acquisition of Pulangui IV,” the resolution said.

Calingasan convened the summit in January to assert the province’s agenda in power supply use following the Department of Energy’s department circular no. DC2010-10-0211 ordering NPC-PSALM to “fully utilize all available capacities of hydroelectric power plants in Mindanao for energy purposes.”

The stakeholders asked the National Power Corporation and PSALM during the first summit to prioritize Bukidnon as they asserted that their power demand requirement be met first before the supply from the Pulangui IV hydroelectric power plant is fed to the Mindanao Grid.

“The deferment for the privatization of Pulangi IV will further result to a shortfall of electricity and the Province of Bukidnon and Southern Mindanao will be faced with a perennial problem of power shortage,” the BPC added in the resolution.

The BPC has trained its eye on sourcing at least P2 billion for the 20 percent down payment if the power complex is sold, Raul Alkuino, board vice president of the First Bukidnon Electric Cooperative, told MindaNews.

He said they have considered a guarantee program to finance the project.

He said this move to buy Pulangui IV will make local stakeholders take control of the power rates.

The resolution also acknowledged that the decision to call for immediate privatization and the acquisition plan is to preempt the privatization or sale of Pulangi IV to independent power producers as this would be tantamount to “actually selling the Filipino people to the capitalists at the expense of the poor, which is the majority of the Filipino people.”

They argued that selling to the IPPs will likely attract“big domestic and multinational monopolies in power generation” with the prospect of bigger profits through higher power rates.

At the joint Philippine Economic Briefing and Regional Development Council meeting in Cagayan de Oro City on March 23, President Aquino warned Mindanao residents that they may be paying higher electricity rates beginning next year, when the  exemption from privatization of the Mindanao power plants of the National Power Corporation ends.

He said the Electric Power Industry Reform Act (EPIRA) exempts Mindanao NPC plants from privatization, and that this has led to a situation where the government subsidized power rates in Mindanao.

“This produced a situation where we kept on selling electricity at about P3 when the actual charge of generation was P5. That, of course, is contributory to debt that is inherited by PSALM and the number is daunting. It is P1 trillion,” he said.

Section 47d of RA 9136 or the EPIRA provides that the Agus and the Pulangui complexes in Mindanao shall be excluded from among the generation companies that will be initially privatized.

“Their ownership shall be transferred to the PSALM Corp. and both shall continue to be operated by the NPC. Said complexes may be privatized not earlier than ten (10) years from the effectivity of this Act, and except for Agus III, shall not be subject to Build-Operate-Transfer (B-O-T), Build-Rehabilitate-OperateTransfer (B-R-O-T) and other variations thereof pursuant to Republic Act No. 6957, as amended by Republic Act No. 7718. The privatization of Agus and Pulangui complexes shall be left to the discretion of PSALM Corp. in consultation with Congress,” the EPIRA provides.

The EPIRA was passed in 2001.  (Walter I. Balane/MindaNews)