Agus, Pulangi hydropower plants, power barge 104 are what remain to be sold- Napocor

JULY 27-AUG 2, 2013

By Cha Monforte, Rural Urban News
The Agus and Pulangi hydropower complexes and the 8-megawatt power barge at Holcim wharf in Ilang, Davao City are what remain to be sold by the National Power Corporation as mandated under Electric Power Industry Reform Act of 2001 (EPIRA).
“The mandate of Republic Act No. 9136 (EPIRA) for Napocor to sell all its generating assets is almost through, except for the three,” Napocor Mindanao corporate lawyer Romero Pacilan said at the sidelines of Napocor’s quarterly MinGen Management Team Meeting in Davao City the other Thursday.
But he said that the matter in going ahead in selling the huge hydropower complexes to private sector is a “policy issue” and “entirely depends on the political leadership, Department of Energy and PSALM (Power Sector Assets and Liabilities Management Corporation).”
He clarified that while EPIRA mandates Napocor to sell its generating plants “technically speaking PSALM, under that law, owns the hydropower complexes and Napocor is only tasked to operate and manage them.”
Napocor before the passage of EPIRA was a State-run power titan. Now it is reduced to being the operator and manager of undisposed power generating assets and small power utilities groups outside of the main electricity grids in small islands in the archipelago.
From a workforce of over 3,000 before 2003 when EPIRA implementation took off, now Napocor has some 600 personnel, bared lawyer Pacilan.
The passage of EPIRA resulted to the breaking of functions, power generation to State-run PSALM with Napocor, and power transmission to also State-run Transco with the National Grid Corporation of the Philippines (NCGP) as the operator and manager of Luzon, Visayas and Mindanao grids.
Napocor Mindanao supplies power to all electric cooperatives, private distribution utilities and directly connected industries in the island.
Middle last year amid power crunch and rotating brownouts occurring in parts of Mindanao the privatization of Agus and Pulangi hydropower plants became a controversy when President Aquino pushed for it during the Mindanao Power Summit in Davao City.
But several Mindanao stakeholders, electric cooperatives, governors and congressman subsequently made hues and cries against it.
The Agus hydropower plant in Lanao del Sur has seven units that generate a total of 700 megawatts while the Pulangi hydropower plant in Bukidnon generates 255 MW. These two hydropower complexes supply more than half of Mindanao’s power needs.
EPIRA scheduled the privatization of Agus-Pulangi hydropower complex 10 years after its enactment or by 2011 under the discretion of PSALM with Congress’ consultation. Efforts to privatize it stymied amid the vocal opposition of revenue-neutral electric cooperatives which feared for uncontrolled increases of Mindanao’s cheap source of power under a private capitalist ownership.
After the power summit, a heightened debate ensued tackling on whether to put Mindanao’s hydroplants to remain under government hands even as PSALM tried to push for privatization to solve Mindanao’s projected power deficiency in the coming years. Bills were also filed at Congress to amend EPIRA to freeze the impending sale of hydroplants.
As PSALM insisted that Mindanao’s hydropower plants were heavily losing with deteriorating state of facilities needing rehabilitation, Mindanao Development Authority Secretary Luwalhati Antonino negated PSALM saying that Agus and Pulangi complexes are revenue-earning and proposing that what should be privatized are PSALM’s losing sectors including its diesel-fed power generating assets.
As the national government dragged its feet privatizing the hydropower complexes, raising questions to the political feasibility of EPIRA’s particular provision of selling Napocor’s generating assets, in August last year President Aquino created through Executive Act 81 the Mindanao Power Monitoring Committee (MPMC) as a multi-agency body tasked to study, coordinate and monitor Mindanao’s power sector and make recommendations for its improvement.
Privatization for the hydropower complexes appear to come in the form of private participation in the uprating of facilities of the hydropower complexes, which the MPMC backed up.
 PSALM announced last week the bidding for the uprating of Agus 6 Unit 4 and of Agus 6 Units 1 and 2, which have estimated cost of P495 million and P2.6 billion, respectively.
Napocor sources said that at press time no bidder has yet submitted a bid in PSALM’s bidding the parts of Agus hydropower complex. (Rural Urban News/Cha Monforte)

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