Careful with power deals

I was happy to have read in yesterday's news at DAILY STAR about my friend, Romeo “Star” Lavilla rallying Ceneco consumers to “be vigilant and lobby against the approval of the Ceneco-Kepco” power deal. Stand up, Star!

I wrote last week that Star should stand up if he wants to touch the stars. Now, Star is touching the stars as he touched the stars many years ago. We must be careful with power sales contracts without transparency.

Let me give you a little flashback. When Fidel Ramos became president in 1992, there was a power crisis. That's how they made it appear. President Cory neglected the power problem, especially when she ordered the nuclear power plant of Marcos in Bata-an mothballed.

Ramos asked for special power from Congress to get into contracts with independent power producers. The authority was complete. Ramos entered into contracts with many IPPs. Contracts were not studied. It turned out many of them were one-sided for the power producers. The losses were charged to the consumers. That was how our power rates went so high.

* * *

In his resolution in Congress asking for an inquiry into the Ceneco-Kepco deal, Congressman Kako Lacson cited the experience with IPPs.

Kepco-Salcon Power is an IPP. And like in 1992, Kepco-Salcon refused to tell the consumers the details of the contract.

Are we not in for a trap? If there's nothing to hide, why did Kepco and Ceneco refuse to tell the general assembly and discuss the sales contract?

And what is the stand of our public officials? Our Mayors, our Congressman? We know Congressman Kako Lacson is standing up. What does Congressman Monico Puentevella say? And Mayor Leonardia?

I heard there are some groups planning a big rally and demonstration in early December against the Ceneco-Kepco deal.

* * *

We live in an island with a volcano. There is no reason that with geothermal, we will source our electricity from coal. Coal is exhaustible and its price fluctuates and subject to manipulation.

With its plant in Cebu , the cost of transmission is already prohibitive. But the greatest danger is the price manipulation of coal.

Napocor President Cyrill del Callar and other officials are facing plunder charges with the Ombudsman now after they purchased last April 5 shiploads of coal at the cost of $84 a metric ton. At that time the world price was $20 a metric ton. Total amount paid was P1.385 billion. The overprice was more than P600 million.

What guarantee is there that this is not repeated in the Ceneco-Kepco deal? That is why the consumers want to see the contract and go into its fine print. The suspicion becomes stronger because Ceneco refuses to reveal the contents of the contract. Star Lavilla, Romana de los Reyes, Bishop Vicente M. Navarra, and many others want to know.

* * *

Today in West Visayas we have the lowest rate of electricity. If we go into this contract, our rate might increase to probably equal, if not higher than that at Noceco, Vresco, and those in Panay .

What reason why our rates will be lower than theirs?

One thing sure, ERC will increase the rates by P6 per kilowatt hour soon. This could be to cover up for the losses incurred by Napocor.

Last week, ERC said there will be no rate increase this year. In government PR language, this means they will increase the rate soon.

And Opposition Rep. Teofisto Guingona III said it yesterday, probably after Christmas ERC will increase electricity cost by P6 per KWH. Congressman Guingona said the cause is the manipulation by the Power Sector Assets and Liabilities Management (PSALM) which also involved the Wholesale Electricity Spot Market (WESM) and the Philippine Electricity Market Corporation (PEMC).

* * *

The scenario is chilling. Bacolod City is competitive and business-friendly because of our competitive power rates. The moment we lose this competitiveness, businesses and investors will go to other places which give them a better deal.

And our councilors, what do they say?

A friend said, why don't Ceneco consumers write an open letter to President Arroyo? If Kepco and NEA can do it in Noceco and Vresco, we must not allow it done to Ceneco. Good idea.*

back to top