Mr. Luis Manuel Corral
Co-Convenor
Alliance for Consumer Empowerment (ACE)
Member, Laban ng Mamamayan para sa Katotohanan at
Katarungan (Lampara)
April 2, 2012
HOW TO CREATE
A POWER SHORTAGE?
DOE:
MONITORS
ABOITIZ:
Available PB
Power
Expensive
(P15 kwh)
NGCP:
Releases
Power
PSALM RUNS
NPC
March repair
Agus4
EDC: Siphons
profits Power
(P2.97 kwh)
NPC: Agus 57
Less water
PSALM sells NPC
PB 101, 102, 103,
104
Mindanao Power Crisis: Manmade or Artificial
The DOE just monitors the power industry
NGCP Reserve Requirements
(One Taipan/Sy)-Unusually high/
less power dispatched
PSALM runs NPC thru OMA
PSALM –NPC Agus 4 repairs
-Spotted 2 years ago
-Spotted last year, should be repaired December
-Instead repaired March/wrong time schedule
(And yet water level as high as 5 months ago)
PSALM-NPC Downward units
Agus 5, 6, and 7
Less water cascading from Agus 4
so less power
Therma Marine (Aboitiz)
Power Barges 117 & 118 200 MW
(Available and very expensive)
Price: P11-P14 per kwh
EDC (Lopez)
Investing more in new capacity
In Chile and Peru
PSALM Privatization of
NPC Barges 101, 102, 103, 104
The problem according to the NGCP is that
there is 401 MW power supply deficit in
Mindanao.
(a)
(b)
(c) = (a) –
(b)
(d)
Available
Capacity
(MW
Peak
demand
(MW)
Surplus/de
ficit (MW)
Required
reserve
margin
(MW)
1,149
1,300
(151)
250
(e) = (b) +
(d)
(f) = (e) –
(b)
Peak
(W/reserve
demand +
margin)
Required
Surplus/
reserve
deficit
margin
(MW)
(MW)
1, 550
401
According to the DOE: It’s the
Supply Problem Stupid!
DOE Proposal: Focus on Supply
 Repair Agus 4 (one month)
 Rush ERC to decide favorably contracts
between 8 electric co-ops and 2 Therma
Marine (Aboitiz) power barges (200 MW)
 Privatize four remaining power barges 101,
102, 103, 104 and reposition them in
Mindanao

According to Consumers:
It’s the supply and cost of
power Stupid!
THE MINDANAO PEOPLES SOLUTION:
FOCUS ON SUPPLY AND COST OF
POWER
 Cheap hydro-power was intended to drive
growth of Mindanao which faced
insurgencies, underdevelopment and
separatist movements

According to Consumer: It’s
supply and cost of power
Stupid!
 Cheaper power intended to drive commerce,
industries and jobs creation
 Expensive power will cause investors to
shun Mindanao, drive away current industry
and commerce, and perpetuate poverty in
Mindanao
CRITIQUE OF DOE SOLUTION
 Palace signalling fast-track ERC approval of
expensive contracts (P8 to P14 per kwh) for
power coming from Aboitiz-owned Power
barges 117 and 118.
 What about consumer interest?
 What about inclusiveness and participation
of consumers in ERC to keep profit level of
Therma Marine (Aboitiz) Reasonable?
CRITIQUE OF DOE SOLUTION
 Privatizing last-resort power barges leaves
us with no resort to address similar
shortages occurring in Luzon and Visayas
 All Philippines- not just Mindanao – left to
mercy of power producers who can
deliberately refrain from investing in
additional power capacity to create
“shortages”
 “Shortages” will require solutions involving
expensive power
Proposed Solution No. 1
NAPOCOR Power Barges
Power Barge
101
102
103
104
Maximum
Present Location
Installed Capacity
(MW)
32
Brgy. Obrero, Iloilo
City
32
Brgy. Obrero, Iloilo
City
32
Brgy. Botongan,
Estancia, Iloilo
32
Holcim Compound,
Ilang, Davao Cty
 PB 104 is already part of the Mindanao grid but it’s
available capacity is only 10 MW as there is a need
to rehabilitate to reach 32 MW full capacity
 Do not sell the power barges. Instead transfer PB
101, 102, and 103 to Mindanao and fully utilize their
maximum installed capacity (96MW) and also
fully utilize PB 104 (32 MW). If PSALM/NPC/DOE
will follow our recommendation, then, an
additional 118 MW will be available for the
Mindanao grid.
Proposed Solution No. 2
 NPC Agus-Pulangui Hydro-Power Plants
Installed Capacity: 982 MW
Available Capacity: 622 MW
 Do not sell the Agus-Pulangui hydro-power
plants.
 Rehabilitate the Agus-Pulangui hydro-power
plants and fully utilize their installed capacity of
982 MW. If that is done, an additional 360 MW
will be utilized by the Mindanao grid.
Additional power supply
118 MW (from PBs 101 (32 MW), 102 (32 MW), 103 (32
MW), 104 (22 MW))
+
360 MW (from the full capacity utilization of
Agus-Pulangui hydro-power plants)
=
478 MW (additional power for
Mindanao grid)
Proposed Solution No. 3
NGCP to reduce the 250 MW reserve
capacity to only 100 MW and dispatch
the reserve 150 MW for the Mindanao
grid to increase supply.
Proposed Solution No. 4
 Operational Management Agreement (OMA)
contract which allows PSALM to run the NPC as its
own, be rescinded. The OMA obligates NPC to
remit its gross receipts to PSALM for the latter to
pay the stranded costs of NPC to international
creditors.
 NPC must be able to recover all its gross receipts,
to be able able to allocate sufficient funds to the
flushing and cleaning up of the siltation that is
apparent in the Agus-Pulangui hydropower
complex area and to expand or put up new
hydropower plants.
Proposed Solution No. 5
Mindanao-based electric cooperatives
(distribution utilities) to register with the
Cooperative Development Authority (CDA)
because it will reduce power rates in their
respective franchise areas.
 Allow electric cooperatives to generate their
own electricity

 Electric cooperatives which are registered
with CDA are exempted from paying those
additional taxes such as VAT on distribution
charge and national and local taxes. That
will mean substantial rate reduction.
Proposed Solution No. 6

Require all power firms entering the
Philippines to invest a set percentage of
their annual earnings to the development of
the baseload of Mindanao as part of their
cost of doing business in the country.
Proposed Solution No. 7

Government to conduct of multistakeholders Mindanao Power Summit to
craft the Mindanao Electricity Roadmap and
the possible creation of the Mindanao Power
Corporation to operate Agus-Pulangui
hydro-power complex and other
government-owned power generators in
Mindanao.
Proposed Solution No. 8
 Review and amend the EPIRA. The
EPIRA has not met its expected or
promised results even after eleven years
of its enactment.
 We cannot leave to private generators
task of planning and investing in
power. Not in their interest.
 Rate-making formula (PBR) and
captured ERC making us most
expensive in power in Asia, number 5
in the world
 We will miss out on investments and
jobs they create
Proposed Solution No. 9

Focus on the development of more
hydro-power plants and biomass-fired
power plants which are cheaper
renewable energy (estimated P5/kwh
for hydro and P6/kwh for biomass)
Thank You!