Deputy Speaker Tañada: Agus-Pulangi privatization “not yet inevitable”

VALENCIA CITY (MindaNews/10 September) — The feared privatization of the Agus and Pulangi power complexes may still be averted, Deputy House Speaker Lorenzo Tañada III said here Friday.

Tañada said there is a chance that the Joint Congressional Power Commission will recommend that the Electric Power Industry Reform Act be amended based on the discussions.

He said there is no certainty yet that Congress will allow privatization of the Mindanao power complexes. Tañada admitted that he has advocated against privatization as it is not the solution to the projected power crisis.

But Tañada, who sits in the joint body, cited two scenarios possible in case Congress decides for privatization.  He said there must be preference for the electric cooperatives to run the power complexes, with combined installed capacity of 982 megawatts, so that the stakeholders may still have control.

The representative from Quezon province’s 4th district said he supports the Bukidnon Power Commission’s plan to buy the Pulangi IV hydro electric power complex.

Tañada said another scenario is to privatize only the additional capacity for power generation. He said the main combined capacity of the power complexes must remain with the government.

Tañada was in town to grace the launching of the Valencia City Historical Photos and Cultural Exhibit, an initiative of the Valencia Bukidnon Historical and Cultural Society, which pushed for the creation of a city museum.

Last month, the Bukidnon Power Commission, created by Gov. Alex Calingasan, filed a resolution endorsing the privatization of the Pulangi IV power complex and for Bukidnon stakeholders, through the local electric cooperatives to acquire it so that the power crisis will be averted.

On September 7, the Sangguniang Panlalawigan, after hearing representatives from the First Bukidnon Electric Cooperative and the Bukidnon Second Electric Cooperative explain about the proposed acquisition, expressed support for the plan “in principle.”

The provincial board wanted to know the details of the plan, sources of funds among others. They did not file a resolution pending the presentation of feasibility studies for the plan.

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.

The EPIRA, passed in 2001, exempted Mindanao NPC plants from privatization until 2011. Aquino said 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 (Power Sector Assets and Liabilities Management) Corporation and both shall continue to be operated by the NPC,” the law provides.

It also provides that the Agus and Pulangui complexes “may be privatized not earlier than 10 years” from the time the EPIRA was passed in 2001, “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.”

It also says their privatization “shall be left to the discretion of PSALM Corporation in consultation with Congress,” the EPIRA provides. (Walter I. Balane/MindaNews)