Mr.

Luis Manuel Corral

Co-Convenor
Alliance for Consumer Empowerment (ACE)
Member, Laban ng Mamamayan para sa
Katotohanan at Katarungan (Lampara)
April 2, 2012
Mindanao Power Crisis:
Man-made 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) (d) (e) = (b) + (f) = (e)
(b) (d) (b)

Available Peak Surplus/de Required Peak (W/reserve

Capacity demand ficit (MW) reserve demand + margin)
(MW (MW) margin Required Surplus/
(MW) reserve deficit
margin (MW)
(MW)
1,149 1,300 (151) 250 1, 550
401
According to the DOE:
Its 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:
Its
THE the supply
MINDANAO and
PEOPLES SOLUTION:
cost ofON
FOCUS power Stupid!
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: Its supply
Cheaper power intended to drive
and costindustries
commerce, of powerand jobs
Stupid!
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.
NAPOCOR Power Barges
1 Power Barge Maximum Present Location
Installed Capacity
(MW)
101 32 Brgy. Obrero, Iloilo
City
102 32 Brgy. Obrero, Iloilo
City
103 32 Brgy. Botongan,
Estancia, Iloilo
104 32 Holcim Compound,
Ilang, Davao Cty
Total Capacity 128
 PB 104 is already part of the Mindanao grid
but its 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.
4Operational 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 multi-
stakeholders 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!