Mindanao power crunch
Philippine Daily Inquirer
No chief executive has been more frank and honest in addressing the perennial problem of power shortages in Mindanao than President Aquino is now. Just before the Holy Week break, the President told it as it is. The people and industries in Mindanao have very limited choices: Higher power rates or no electricity at all.
Mindanao suffers an average eight hours of outages daily. Reports indicate that for nearly a month now, Misamis Occidental, Lanao del Norte and Iligan City, among other places on the island, have been experiencing two rounds of brownouts daily, with each lasting two to six hours. Official figures show that Mindanao has a power shortfall of 294 megawatts with demand at 1,157 MW against an actual supply of only 863 MW.
Energy Secretary Carlos Jericho Petilla has projected that Mindanao would have additional power by 2015 based on committed projects in the region. Two coal-fired power plants—a 350-MW facility of the Aboitiz group in Davao City and a 105-MW complex of the Alcantara family in Sarangani—will add to the supply in early 2016. The challenge, as Petilla pointed out, was how to address the critical power situation from now until 2015.
Officials and industry players have blamed the power outages on the lack of power infrastructure in Mindanao. Yet the power supply shortage on the island has been forecast and discussed for nearly 10 years ahead.
The most plausible explanation we saw was provided by economist Gerardo Sicat, University of the Philippines professor and the economic planning minister during the Marcos regime. In a paper published in March last year on the impending power crisis in Mindanao, Sicat said the electricity problem on the island has been a crisis waiting to happen: “The signs had been known by all concerned for years, especially by the national government. Inaction on the required policy front meant that the day of reckoning would simply arrive and blow up the picture. That has now become a reality. Government inaction to do the right thing was due to a paralysis of decision-making.”
Sicat lamented that a lack of strong national leadership on the issue permitted conflicting interests to create a stalemate in decision-making, and the stakeholders in the power supply problem acted in opposite and conflicting directions. The power problem now afflicting Mindanao is due to government inaction because “the government did not pursue the series of long-term actions required to solve the power development problems of Mindanao.”
Sicat cited the main causes of the power crisis in the southern region: the Mindanao electricity distribution grid was not connected to the Luzon and Visayas grid; the base load of power generation for the region was not increased sufficiently; the decision to undertake approvals was snail-paced; and the privatization of government power plants through the Electric Power Industry Reform Act was not undertaken.
Back to the interim solution, Petilla presented a plan to Malacañang that would entail the procurement of “modular” diesel-powered plants as a “stop-gap measure” until 2015.
“These diesel power plants are seen as the quickest—they can be set up in as early as six months and the maximum is one year. That one year includes four months of procurement by the government,” President Aquino pointed out. The idea was for the government to help the distribution utilities in Mindanao buy 199 modular diesel-fed generators to be spread across the country’s southern region.
But this will come at a price. The President warned that Mindanao residents have to pay higher power rates as electricity generated from diesel-fed generators would cost more than electricity generated from existing hydroelectric power plants. This has been the problem in the past: People and industries in Mindanao have resented any mention of an increase in their power rates.
President Aquino should now be forceful in ensuring that action will follow his pronouncement. Otherwise, he will be lumped with other chief executives whose promises to resolve the Mindanao power crisis were nothing but campaign promises not meant to be fulfilled. In the meantime, Mindanaoans should accept the fact that the solution to their crisis will entail higher power rates. They cannot forever rely on the aging and climate-dependent hydroelectric facilities. The President was very precise in the choices they have: Pay higher rates or have no electricity at all.
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