Power crisis cries for probe

By Herbert Vego

YESTERDAY’S papers quoted President Ferdinand Marcos Jr. as having denied claims that an artificial power crisis lurks behind the daily red and yellow alerts issued by the Department of Energy (DoE).

“No,” he told farmers in Pikit, Cotabato last Monday. “It definitely is not an artificial crisis. Our consumption suddenly increased significantly, especially because it has been very hot.”

When in “red alert,” the power supply in the grid is so insufficient it may inevitably lead to rotational brownouts or manual load droppings.

When in “yellow,” low power supply diminishes to critical levels but is bad enough to trigger unscheduled outages.

Senator Raffy Tulfo, as chairman of the Senate Committee on Energy, recently filed a Senate resolution (SR No. 1008) seeking to investigate the alarming power supply crisis in the wake of red and yellow alerts across the entire country. Go ahead!

To Mr. Tulfo I say that’s “lumang tugtugin.” It was you who met with officials of the Energy Regulatory Commission (ERC) and the Department of Energy (DOE) one year ago on May 1, 2023 (Labor Day), to complain about “excessive profiteering” of generation companies.

“Kaya sobrang mahal ang kuryente sa Pilipinas,” he told his colleagues, “ay dahil matagal na pala tayong piniprito sa sarili nating mantika ng mga gahamang energy generation company. Kahit mura ang pagkabili ng suplay nila ng coal, sky is the limit sila kung tumaga para sa kita.”

Although I am not a fan of Tulfo, whom I detest for shouting at resource persons during Senate investigations, I believe he is right even if he had cited no documentary proof.

In the past four years, as admitted by the Independent Electricity Market Operators of the Philippines (IEMOP), power prices have soared from ₱5.55 to ₱14.64 per kilowatt-hour (kWh) – mainly due to higher generation rates.

In that connection, I stumbled upon a news report written by Maria Bernadette Romero for the Manila-based Daily Tribune on April 26, 2024.

She began her feature story with this lead:

“The Aboitiz Equity Ventures (AEV), a conglomerate led by the Aboitiz family, has experienced significant growth, largely attributed to the success of its energy arm, Aboitiz Power Corp., the country’s leading power producer.”

She singled out Aboitiz Power as the biggest earner within the AEV conglomerate, having bagged “a net income of ₱17.3 billion in 2023, a 28 percent increase from ₱13.5 billion the previous year.”

By comparison, it dwarfed AEV’s real estate company, Aboitiz Land, Inc., which – according to AEV chief financial officer Jose Emmanuel U. Hilado –netted ₱1 billion in 2023.

To clarify, Aboitiz Power is not a monopoly. There are scores of power plants – whether run by coal, diesel, hydro, solar or diesel fuels — that carry electricity inter-country via submarine cables. They could have prepared in advance for this summer’s extreme heat.

Thus, the scarcity of power supply could not be made an alibi.  If there is scarcity, it could only be because they have abused the law of supply and demand: If a product is in demand but low in supply, its price increases, and vice versa.

This writer used to think that the government could have regulated power-generation prices because of the Electric Power Industry Reform Act (EPIRA) of 2001 (Republic Act No. 9136).

I was wrong based on Section 6 of that law:

“Power generation shall not be considered a public utility operation. For that purpose, any person or entity engaged or which shall engage in power generation and supply of electricity shall not be required to secure a national franchise.

“Upon implementation of retail competition and open access, the prices charged by a generation company for supply of electricity shall not be subject to regulation by the ERC except as otherwise provided in this Act.”

In other words, power generators are not regulated, hence free to impose prices of their services.

Aha, that sounds unfair to the distribution utilities (DUs) — among them MORE Power, Ileco, Akelco, Capelco,  Anteco in Panay —  which could not increase prices without ERC approval.

Unfortunately, since it’s the DUs that collect dues payable to power generators, they bear the brunt of public wrath.

To these power generators we beg, “Please moderate your greed.”