Hammer & Anvil: Thanks Mr. Cusi but No Thanks!

Recently, a national business newspaper ran a headline about the Dept. of Energy mulling the possibility that the output of Mindanao’s hydroelectric power plants may be set aside for the island’s poorest.

Energy Secretary Alfonso G. Cusi reportedly said last 16 November that he has asked the Power Sector Assets and Liabilities Corp. (PSALM) to study allocating the output of Agus and Pulangi to the poorest of the poor in Mindanao. Per the good secretary’s statement, that covers the Autonomous Region in Muslim Mindanao (ARMM) region, the Lanao area and Maguindanao.

Energy Secretary Alfonso G. Cusi told coal industry stakeholders during the Coal Business and Policy Forum 2016 on 16 November at the New World Hotel, Makati City: “What we’re trying to address is to bring down the electricity cost, by finding the right energy formula that will also reduce carbon emissions as part of climate change mitigation. The DOE will be working with you [coal industry stakeholders] to help cushion the power financial burden to our consumers.” (DOE Supplied Photo and caption)

To quote the late Richard Harris in his famous soliloquy Too Many Saviors in my Cross, “Our measurements grow strangely dissimilar.”

Ser, are you aware that eleven of the 20 poorest provinces in the Philippines are located in Mindanao? Heto po, according the ranking of the Philippine Statistics Authority (PSA): Lanao del Sur (74.3%); Sulu (65.7%); Sarangani (61.7%); Maguindanao (59.4%); Bukidnon (58.7%); Sultan Kudarat (56.2%); Zamboanga del Norte (56.1%); Agusan del Sur (54.8%);Lanao del Norte (50%); North Cotabato (48.9%); and Zamboanga Sibugay (44.9%).

Mr. Secretary, 8 of the top 10 poorest provinces are in Mindanao (80% po!) and 11 of the top 20 (55% po!) or over half of the 20 poorest provinces in the whole country. And that’s not even going into the nitty gritty of all those families in Mindanao living below the poverty line in the other provinces of the island which are not counted among that list.

Ser, your intention of encouraging investments in Mindanao by using the output of Agus and Pulangi for the manufacturing sector through industrial zones to encourage industrial development and help create jobs is perpetuating an injustice that already pervaded the island since the Agus VI plant at the Maria Cristina Falls was set up in 1950.

66 yrs after the Agus VI Hydroelectric Plant was set up in Bgy Maria Cristina, Iligan CIty, many communities along the Agus River that feeds it remain without electricity (Napocor Photo)

Indeed, the road to hell is paved with good intentions. You are correct in saying the output of the hydro complex as the cheapest source of power in Mindanao. But who has benefited from the country’s industrialization track using the cheap hydroelectric power plants? Surely, not the people of Mindanao, but foreign investors and carpetbaggers from the North who pillaged the island’s patrimony which rightfully belongs to its people and took it somewhere else.

If your staff has been diligent in their homework, they will tell you that the Expanded Rural Electrification Program which sought to attain 100% barangays electrification by 2008 and 90% household electrification by 2017 has fallen flat on its behind.

Indeed, you recall how you reported earlier that 100 percent of the country’s 42,036 barangays barangays now have electricity, but Senator Panfilo Lacson found out during a public hearing of the Committee of Appointments that many sitios in those barangays still have no power (Casayuran, 2016).

Sen. Loren Legarda also found out that the program has only electrified 89% of households in Luzon, 79% in the Visayas, and a mere 56% in Mindanao. Urban electrification was 94%, while rural electrification was only 73%.

She noted that most of those who have no access to electricity live mostly in the rural areas, (which account for 4.4 million households living in remote areas) as well as in the outskirts of Metro Manila and Davao. (Torregoza, 2016).

If cheap electricity from the Agus-Pulangi Hydropower complex is exclusively alloted for household use, even remote homes like these Tigwahonon households can afford electricity. (RMB,NPN)

I’m sure your noble idea to share the cheap electricity of Agus-Pulangi to the poorest of the poor stems from the Association of Mindanao Rural Electric Cooperatives (AMRECO) proposal to reduce the cost of electricity for residential households in Mindanao by allocating the entire output of the Agus-Pulangi for residential consumers.

Instead of being allocated to directly connected industries and the systems operator, the cheap hydro power would be allocated to distribution utilities (DUs), electric cooperatives or private, because the DUs are the ones serving the poorest of the poor, who are the targets of  your boss, Pres. Duterte’s administration for the reduction of electricity rates.

Your boss, the President can order the PSALM-NPC to make the allocation, which should be implemented asap, and stay in perpetuity, for as long as the Agus and Pulangi are generating electricity.

Your staff can tell you the hydro plants generated in 2015 3,858 gigawat-hours (GWH), or 38% of the total generation of all power plants in Mindanao (10,000 GWH).

Under favorable weather conditions, power generated by the hydros can exceed 4,500 GWH. Since residential consumers only used 3,151 GWH in 2015 (31% of total consumption, including system loss, in Mindanao) there is still sufficient electricity from the hydro plants to supply the present and future electricity needs of residential consumers in Mindanao.

Residential consumers stand to have their electric bills reduced by P1.20 per kWh (and save P120 on the monthly bills of indigent households that consume an average 100 kWh monthly) once this is implemented.

Salimah Salacayan Ampao from the small rural village of Sugod. Marawi City has eight children. (OXFAM photo)

Besides lowering electricity rates for residential consumers outright, this scheme can even lower electricity rates further during the rainy season in Mindanao should the DOE and ERC restore dump power rates when excess power from the island’s hydroelectric power plants are made available to coops at half the price.

Your boss, the President can bring down the cost of electricity even further for residential consumers by asking systems operator National Grid Corporation of the Philippines (NGCP) to source its ancillary requirements elsewhere to free up the substantial allocation of some 355 MW it is now getting from the hydros.

Since there is now surplus power in the Mindanao grid, NGCP can source its ancillary reserves elsewhere, so the cheap power coming from Agus-Pulangi can be allocated to the coops and private utilities serving households, who deserve to benefit from the island’s patrimony which rightfully belongs to the people.

But not to worry. You can still pursue your intention of providing cheap electricity to attract industries to set up plants in Mindanao once the Agus-Pulangi is taken from the power mix and allocated exclusively to residential users.

That’s because once the petition is approved by the president, the bulk electricity prices from thermal power plants in Mindanao would inevitably fall given the increased competition for the surplus electricity that would be made available from the grid (300MW) plus another 700MW that would be freed up by DU’s from their contracts with private power generating companies, making available a total of 1,000 MW to benefit industrial users and the systems operator.

Power generation companies have long been harping about taking the cheap prices offered by the Agus-Pulangi out of the Mindanao bulk power market so prices are not skewed and can “reflect their true levels.”

So let’s have your boss take out Agus-Pulangi out of the power mix by making it exclusively available for residential users, and let competition from the geothermal, coal-fired, and oil-based thermal power plants seek their true prices in the market. 

You can even bring in your beloved Wholesale Electricity Spot Market (WESM) to sell all that excess power so long as you don’t include Agus-Pulangi and allow the common tao who are the true owners of the island’s patrimony, for once, benefit from it. 

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