Petilla backs Mindanao Power Corporation bill with refinements
Joint House Committees okay Minpocor Bill
Outgoing Energy Secretary Carlos Jericho L. Petilla expressed his support for the creation of a Mindanao Power Corporation with some enhancements.
During a press conference held Friday, 22 May at the Misamis Oriental Rural Electric Service Cooperative-1 (MORESCO-1) 45th Annual General Assembly, Petilla said he fully supports the objectives of the proposed Mindanao Power Corporation (Minpocor) with some refinements.
“While I agree with this proposal, I wonder why we don’t give it instead to the end users which are the cooperatives? If you will be the ones to use it, why set up a middle man which would just result in a higher price?” he asked.
The Joint House committees on Energy; Government Enterprises & Privatization; and Mindanao Affairs approved on May 21st the bill aiming to establish Mindanao Power Corp. (Minpocor).
Entitled “An Act Creating the Mindanao Power Corporation and Providing Funds Therefore,” the bill is principally authored by Rep. Edgardo R. Masongsong (1-CARE Party List) with 33 other legislators as co-authors. aims to consolidate the similar House Bills No. 676, 2621, and 4883.
Masongsong, who also addressed the MORESCO-1 AGMA earlier, stressed he was devoting his full focus on the passage of the Minpocor Bill before the term of the current Congress ends next year.
“So that is the gist of the MPC, which I fully support, except for some little changes which need to be made. However, this would still take time since it still has to pass through Congress, it will still have to pass through the plenary where it will be debated upon, and after that, it heads for the Senate where we have no idea what would happen to it, so there might not be enough time to pass it and it may lapse. If it doesn’t, perhaps the next Congress or the next Senate would have to pass it,” Petilla said.
Former National Power Corporation (Napocor) President Guido Alfredo A. Delgado shares Petilla’s reservations regarding the possibility of the proposed Minpocor becoming another third party which could unnecessarily increase the cost of power in Mindanao.
In an opinion column regarding the privatization of Independent Power Producer Administrator (IPPA) contracts published recently by MindaNews, Delgado pointed out that IPP Costs include administration, fixed and energy charges.
He said the administration charge is just an added cost that increases the generation cost as evidenced by the recently privatized Mt. Apo geothermal power plants.
“As a result, the generation cost increased from P3 per kilowatt hour (kWh) to P5.37 per kWh, according to the Association of Mindanao Rural Electric Cooperatives or AMRECO,” Delgado said.
“The AMRECO said that the significant increase in the generation charges was due to the administration cost charged by the IPPA. If these figures are correct, the difference of P2.37/KwH is what we in finance call an “arbitrage” because the profit is made out of an extraordinary market condition. At that spread, one can already put up a coal-fired power plant!”
In addition to his support for the Minpocor bill, Petilla also suggested to its advocates to consider adding the STEAG coal-fired power plant to its portfolio.
“In the privatization of the Mindanao Power Corporation, all that’s mentioned is only the Agus-Pulangi hydro. I suggested they include STEAG in the portfolio. Why? STEAG is cheaper than the new coal plants of Aboitiz, San Miguel and Filinvest. Why have it privatized? Instead include it in your portfolio for MPC. So even if it makes your MPC price a little more expensive, it is still cheaper than if you source it from the other newer plants.”
Meantime, Petilla clarified that he has tendered his irrevocable resignation as energy secretary which has been accepted by President Aquino provided a qualified replacement is found.
“The President said there are laws which stipulate that you cannot simply walk away from a high position in government, there are laws to be followed, you should have a replacement. Although he accepted it, he said please stay on until I find a replacement.”
Petilla said he has been helping the Chief Executive in the search for a replacement but personally prefers the appointment of a career undersecretary who would implement programs already in place.