People's Domain

[Opinion] Connecting the dots on the power crisis

First it was in Luzon in the 80’s to early 90’s. The Visayas became next in the late 90’s to early 2000. Now, it is in the turn of Mindanao.

The power crisis has become a lingering problem of the national government in the span of more than 30-years crossing over the administrations from Cory Aquino to Noynoy Aquino.

In actuality, the power supply problem is not a dilemma of local governments within the territory of island-groupings, such as; Luzon, Visayas and Mindanao, but rather a problem of national scale. Yet aside from legislative interventions in the national level, the solutions were undertaken on per island grouping and were largely dependent on private sector investment and financing.

The solutions that were carried out likewise varied from one administration to another. For instance, recognizing the problem that preceded his regime, the former strongman Ferdinand Marcos pushed for the development of the use of nuclear power for energy generation. Corazon Aquino did not pursue nuclear power and opted for other solutions like creating new capacity for power generation. The solutions, however, could not be carried out overnight so Luzon plunged into daily rotating blackout until the end of Cory Aquino’s term and extended to the administration of her successor Fidel Ramos.

The Cory Aquino administration, however, made a large involvement why we are confronting problems regarding the power sector today. It was during her term that the Philippines embraced the recommendation of the Asian Development Bank that the country go for privatization by entering into the Power Sector Restructuring Program in 1987.

The Ramos administration put into full operation the privatization of the country’s power sector. During his term, Ramos fast-tracked solutions in solving the power crisis by securing emergency powers from Congress which provided him with the authority to enter and sign contracts with private independent power producers or IPPs. The contract or the deal was so attractive for it is packed with government’s sovereign guarantees and with the IPPs having a ready buyer – the National Power Corp. (Napocor).

For a while, the power supply stabilized yet solution came with a heavy cost to consumers and taxpayers alike. On one hand, it was the consumers that carried the burden of the cost from the contracts that Ramos signed in the form of pass-on charge through the Power Purchased Adjustment or the dreaded PPA. On the other hand, the government utilized resources generated from taxpayers to cover the cost of Napocor’s mounting debt as a result of the contracts it signed with IPPs. The years that followed steadily buried Napocor deeper in debt.

The cost of these solutions is something that we continue to pay until today as consumers of electricity in the form of stranded debts, a charge that will be passed on to consumers under the universal charge.

In his brief presidency, Joseph Estrada signed additional IPP contracts and the legislators under his term started the ball rolling by consolidating laws pertaining to the power industry and passed the Omnibus Power Bill. This has become the forerunner of the Electric Power Industry Reform Act or EPIRA.

In 2001, Gloria Arroyo signed EPIRA into law paving the way for the full privatization of the country’s power industry. This provided the private sector with the green light to enter in the generation, the transmission and the distribution of electricity.

Looking back from 1987 until the present, our country’s power industry hardly achieved some level of stability. The solution that was employed by government in the Visayas is a clear manifestation that we are not closing in towards sustainable solutions. The high cost of electricity in Iloilo City alone is a fitting illustration that coal plants and coal fuel is not the way to go if we want to achieve economic development.

The recently held Mindanao Power Summit further revealed that the PNoy administration does not have new solutions to old problems. What emerged were mostly privatization of current generating capacities like hydropower plant present in Mindanao and the construction of more coal-fired power plants. These solutions have been proven with time as unsustainable, disadvantageous and costly. These were lessons drawn out from the historical experiences of electricity consumers in other parts of the country.

Electricity consumers in Mindanao have all the reasons to reject old solutions. If it did not work in Luzon and the Visayas, how could these proposed solutions solve the problem in Mindanao?

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