Electricity rates for residential households in Mindanao can be reduced by as much as P2.25 per kilowatt hour if the output of the Agus-Pulangi hydroelectric power complex is exclusively allocated for residential consumers.
“Upon unbundling of the PSALM charges for generation (MCPC will work on this in 2017), the rates for the hydro will be reduced to the true generation rates of 2.00 pesos per kWh,” said Engr. David A. Tauli, president of the Mindanao Coalition of Power Consumers (MCPC). “Residential consumers in Mindanao will get a reduction of 2.20 pesos per kWh compared to what they are paying now.”
Homes like this one in Lubilan, Naawan, Misamis Oriental can enjoy the benefits of cheap electricity if Mindanao’s hydropower plants were exclusively used for households. (photo by Elmer Velasco Sayre)
MCPC is a coalition composed of a cross-section of power consumers in Mindanao coming from electric cooperatives, private distribution utilities academe, consumers, and residents. It has been a close ally of the Association of Mindanao Rural Electric Cooperatives (AMRECO) and shares the group’s advocacy to get the Duterte government to allocate to residential consumers in Mindanao the entire generation of the hydroelectric power plants on the Agus and Pulangui rivers.
AMRECO President Sergio C. Dagooc earlier said they would request the Mindanao Power Monitoring Committee (MPMC) Technical Working Group to implement measures which will make available to distribution utilities the remaining capacity of the APHC for exclusive distribution to residential consumers.
“Instead of being allocated to industries and the systems operator, the cheap hydro power should be allocated to electric cooperatives or private distribution utilities, because they are the ones serving the poorest of the poor, who are the targets of this administration for the reduction of electricity rates,” Dagooc stressed.
Tauli said the total generation of the hydro plants in 2015 was 3,858 gigawatt-hours (GWH), or 38% of the total generation of all power plants in Mindanao (10,000 GWH).
“On a good year, the hydros generation could exceed 4,500 GWH, so the reduced figure may be a result of the suppression of the AP generation, e.g., by using the hydro plants as ancillary reserve, with consequent spilling of water from the dam,” he explained.
Since residential consumers only consumed 3,151 GWH in 2015 (31% of total consumption, including system loss, in Mindanao) there is sufficient electricity from the hydro plants to supply the present and future electricity needs of residential consumers in Mindanao.
“At present, the bundled rate for generation by government-owned power plants in Mindanao is 3.00 pesos per kWh, while the average rate of bulk generation from all sources in Mindanao in 2015 was 4.20 pesos per kWh.”
Residential consumers stand to have their electric bills reduced by P1.20 per kWh (and save P120 on the monthly bills of poorer households that consume an average 100 kWh monthly) once this is implemented.
MCPC also supports AMRECO’s advocacy to stop the privatization of Mindanao’s hydropower plants.
“Privatization will increase the rates of the hydro plants to at least 4.00 pesos per kWh, or double their true rates. That will mean windfall profits of P8-billion every year for the private generation companies that will either buy the hydro plants, or their independent power producer administrator (IPPA) contracts, all to be paid for from the pockets of Mindanao’s power consumers,” Tauli said.
“Now that there’s a surplus of power in the grid, we will ask NGCP to get their ancillary reserves elsewhere, so the cheap power coming from Agus-Pulangi can be allocated to the coops and private utilities serving households who rightfully deserve to benefit from the island’s patrimony which rightfully belongs to the people,” Dagooc added.
Should the AMRECO petition be approved by the president, the electricity price from thermal power plants in Mindanao is likewise expected to fall given the increased competition for the surplus electricity now available from the grid (300MW) plus another 700MW that would be freed up by DUs from their contracts with private power generating companies, making available a total of 1,000 MW to benefit industrial users and the systems operator.
“We are now drawing up President Duterte’s vision for consumers, especially lowering the rates for electricity and the eradication of brownouts,” Energy Undersecretary Benito L. Ranque told participants at a round table discussion on the development of a Social Development Framework for the Energy Sector hosted by the First Bukidnon Electric Cooperative Incorporated (FIBECO) and facilitated by Balay Mindanaw last 13 September 2016 at Maramag, Bukidnon.
“We are here in behalf of those households which cannot even afford the benefits of electricity, whose experience has been a cycle of one disconnection after the other, because of their incapacity to pay,” Ranque stressed. “Now that we have a president who understand the need for social development, let’s take advantage of this opportunity to take up the cudgels for these unfortunates whose plight may never have been discussed in the DOE, the ERC or in Congress.”
Ranque noted how the Philippines’ energy industry has made billions for a few which are ironically being paid for by millions who share very little of those profits.
“Ideally, we are looking at how we can restructure this unfortunate situation perpetuated by the R.A. 9136 or Electric Power Industry Reform Act of 2001 (EPIRA) so those who earning billions from this industry share the profits which they keep for themselves instead of pursuing social development, and passing on risks to the government and consumers,” he said.
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