Duterte warns power companies to shape up

DAVAO CITY (MindaNews / 26 May) – Amid the Mindanao power crisis, incoming President Rodrigo R. Duterte warned the major power players in the country that they must shape up or else he will open the industry to foreign investors to deliver a sufficient power supply to the island that has long been plagued by power outages.

President-elect and Davao City Mayor Rodrigo Duterte warns power companies to shape up, or he will be forced to open the country to foreign investors. He made the pronouncement during a press conference at the Royal Mandaya Hotel, Davao City in the wee hours of the morning on Thursday (26 May 2016). MindaNews photo by Toto Lozano

Duterte issued the same warning earlier to telephone companies to work on the country’s slow internet speed.

In a late night press conference on Wednesday at the Royal Mandaya Hotel here, the incoming president said that he will be forced to open the country to investors to bring down the electricity costs.

He said consumers take the burden of paying high electricity costs due to the power industry’s penchant to tap expensive energy sources like coal and diesel but failing to deliver sufficient and reliable power supply.

Davao City, for instance, suffered rotational brownouts of up to five hours last month due to the shutdown of the first 150-MW unit of Therma South Inc. (TSI) from April 6 to April 17 and the reduced water levels at the Pulangui River and Lake Lanao because of the El Niño phenomenon.

“Kaya sabi ko you shape up. I told you before, shape up because if you don’t and hindi na kaya ng tao, kakainin sa energy (electricity bills) – importations (of fuel) – papasukin ko ang lahat, pati ang Nigeria, meron kayong oil? You want to put up (power plant)? Come here. We will amend the law to allow you. Babaan nyo. Tapos sino pa, Mexico? Sige bagsak (price) ng husto para kayo wala ng kita,” he said.

On privatizing the government’s power assets, Duterte said “not at this time.”

The state-run power assets in Mindanao are the six hydroelectric plants along the Agus River in the Lanao provinces and the one along the Pulangui River in Bukidnon, with a combined installed capacity of 982 MW.

During the Aboitiz Power’s Therma South Energy Project inauguration last January 8, President Benigno S. Aquino III said that Mindanao’s power woes started when no investors came in to Mindanao to build more capacities after Mindanao legislators sought for a 10-year exemption from the Electric Power Industry Reform Act (EPIRA) for the Agus-Pulangui hydropower plants.

The government claimed private power companies are reluctant to pour in investments in Mindanao as they could not compete with the cheaper rates offered by the hydropower plants.

“The result: As the demand for electricity grew, the supply didn’t. In fact, the hydroelectric plants that were once abundant sources of energy suffered from a number of factors, including the lack of regular maintenance, the vanishing watersheds, and the worsening effects of climate change,” he said.

Aquino said that they anticipated the Mindanao power crisis just before he assumed post six years ago.

“In recent years, Mindanao has had very little energy surplus. In 2010, this resulted in rotating brownouts that understandably frustrated our countrymen, and that stifled local economies. This was a problem we had anticipated even before we took office, which is why, from day one, we made a stern commitment to foster an environment that would encourage the private sector to make massive investments in energy in Mindanao,” he said.

More coal plants are set to be online this year – a 100 MW unit of the Sarangani Energy Corporation in Maasim, Sarangani Province, and two units of San Miguel Power Corporation with combined capacity of 300 MW.

Davao Light and Power Company (DLPC) vice president for Reputation Enhancement Rossano Luga, speaking in “Wednesdays’ at Habi at Kape” in Abreeza of the Ayala Malls, said that they are negotiating with San Miguel for additional 80 MW to jack up its portfolio.

Luga refused to disclose as to when their negotiation would come to fruition.

DLPC’s franchise area covers Davao City, Brgy. Bincungan in Tagum City, and Carmen, Sto. Tomas and Braulio Dujali towns in Davao del Norte.

The DLPC current portfolio is 183 MW from the National Power Corporation (NPC), 49.5 MW from Hedcor Sibulan, 4 MW from HEDCOR-Talomo, 30 MW from Therma Marine Inc., 100 MW from TSI, and 50 MW from Southern Philippines Power Corp.

Luga hopes that their franchise area will not experience rotational brownouts when TSI implements a scheduled maintenance shutdown for its 150 MW unit 2 starting June 18 until July 18.

DLPC serves a total of 305,947 residential customers, 43,296 commercial, 3,750 small industrial, 181 primary retail, and 2 69-kV customers (Holcim and Steel Asia).

“Our positive growth are on the residential and commercial but because of brownouts we did not have the positive growth for big industrial and 69-KV,” he said.