POSTSCRIPT / December 4, 2007 / Tuesday


Philippine STAR Columnist

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'Bicol Express' rushes amendments to Epira

THEATRICS: Much has been said about the supposed need for that Trillanes caper at the Manila Peninsula last Thursday to call attention to what is wrong with President Gloria Arroyo and her administration.

It’s hard to buy that line. All that Sen. Antonio Trillanes IV has to do – even in detention — is talk into a microphone or issue a statement about anything momentous he wants to say and the media will carry it.

Trillanes does not have to mock the court and storm out of a hearing, march with his armed guards, take over a five-star hotel and threaten mayhem to grab attention or have his message heard.

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VIOLENCE: Can you imagine what would happen if every body who wants to be heard, or to air a grievance, would resort to some headline-grabbing violence?

Armed violence, or the threat of it, does not add to the substance or the validity of Trillanes’ or anybody’s grievances. In fact, use of violence detracts from whatever merit his arguments may have.

This is not to say that his grievances or his accusations are baseless. Many of them are probably valid — as he may want to prove in sober, orderly fashion.

The former navy officer’s seeming predisposition to violence only confirms reservations that Trillanes may not be mature enough for the exalted office of a senator, whose main function is legislation, not revolution.

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EPIRA ALERT: There are ongoing attempts, meanwhile, to continue the monopolistic hold of the National Power Corp. on the country’s power system.

The House committee on energy approved two weeks ago amendments to the Electric Power Industry Reform Act of 2001 (Epira) that would lower the privatization threshold of Napocor generating plants from the present 70 percent to 50.

The goal of Epira is to transfer to competent private hands at least 70 percent of Napocor generators to promote healthy competition and lower the price of electricity.

But a syndicate wants to lower the threshold to just 50 percent, at which point the sale of assets stops – and Napocor’s hold on the system continues, defeating the spirit of privatization.

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NUMBER vs CAPACITY: The privatization threshold refers to the number of power plants, not generating capacity, that would be sold and released from Napocor control.

With 70 percent of power plants transferred to private hands, the Napocor’s monopolistic hold on the system would be broken.

But at 50 percent (of the number, not capacity, of power plants), the Napocor gang will continue to control power generation and pricing. That is because the 50 percent remaining in its hands could have a combined capacity of more than 50 percent of total load.

While giving the impression that at least half of power generation has been privatized (which is good), more than 50 percent of total capacity is actually still left for the Napocor mafia to play with (which is bad).

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BICOL EXPRESS: Control over generating capacity is apart from the control over the purchase of coal. Independent power producers (IPPs) are not allowed to buy their own fuel, but must purchase it through the Napocor.

The modus operandi in the cornering of the coal business is: They let the fuel stock of IPPs run low, then schedule biddings that are programmed to fail — to justify “emergency” negotiated purchases at an overprice.

Incidentally, two sons of President Gloria Arroyo are active in the House committee on energy processing amendments to Epira.

The panel, chaired by Pampanga Rep. Juan Miguel “Mikey” Arroyo, voted two weeks ago to adopt the amendments introduced by Camarines Sur Rep. Luis Villafuerte lowering the privatization threshold.

President Arroyo’s other son, Camarines Rep. Diosdado Ignacio Jose Maria “Dato” Arroyo is also a member. He and Villafuerte are identified with the “Bicol Express” rushing Epira amendments.

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OPEN ACCESS: Last Nov. 20, the Arroyo committee approved a resolution amending the Epira to bring down the privatization threshold to a level at which “open access” or a freer market could be allowed.

Industry players complained they were not given a chance to present their insights. Three hearings were called on short notice, preventing parties with contrary opinion from participating.

Rather than being amended, many players said, the law should just be given time to work. They said that the problems are traceable to the slow and haphazard implementation and not to any serious flaw in the law.

Epira seeks to ensure the quality, reliability and affordability of electricity. It is based on a hybrid of the power schemes in California, Australia and the United Kingdom.

But more than six years after its enactment, retail competition and open access have not been achieved, because more than 80 percent of the generating capacity still remains with Napocor.

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SUCCESSFUL SALES: The American Chamber of Commerce has said that amending Epira would be counterproductive and create an atmosphere of uncertainty that dampens investments in the power industry.

This is unfortunate since recent sale of Napocor assets has shown that there is a resurgence of foreign and local investors’ interest. Samples of successful sales are those of Pantabangan, Magat, Masinloc and the Ambuklao-Binga power plants.

The 600-megawatt Masinloc coal plant alone fetched $930 million from the American power company AES. That was more than $1.55 million per megawatt for a 10-year old hunk of steel.

This improves on the rule of thumb, which is that to build a new power plant, $1 million is needed per one megawatt of power of the generating plant to be put up.

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(First published in the Philippine STAR of December 4, 2007)

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