Panay – at the tail-end
Posted on December 12 2003 |
Issues, struggles and campaigns
on the power sector
in the Island of Panay, Philippines
by Ian M. Seruelo
Freedom from Debt Coalition
Iloilo Provincial Chapter
ianseruelo@yahoo.com
The island of Panay is part of the Visayas islands, the island group in the middle of the Philippine archipelago. It is composed of 4 provinces –Iloilo, Capiz, Aklan and Antique. Found at the bottom part of Panay is the island-province of Guimaras.
The islands of Panay and Guimaras are part of the Panay grid that connects to the Negros, Cebu and Leyte grids to form the Visayas power grid. These main grids have varying generating capacities and power consumption. The biggest excess in energy generated comes from the island of Leyte and it supplies the deficiencies in all the other islands combined.
Currently, the Panay Grid is powered by the generating plants of the state-owned National Power Corporation (NPC). These generating assets are up for privatization by virtue of the passage of the Electric Power Industry Reform Act (EPIRA) in 2001.
An off-grid 72 MW diesel power plant, owned and operated by Mirant is located in the City of Iloilo, the island’s economic center. Transmission, which is still owned by NPC-TransCo, is also up for privatization. The distribution sector is handled by several electric cooperatives and a private distribution utility (Panay Electric Company or PECO).
Leyte’s geothermal fields generate the biggest surplus in the region. These fields even dispatch part of its generated power to Luzon. About 180 MW from Leyte is also sent to the island of Cebu via submarine cables. The excess in Cebu is then channeled to the island of Negros. The excess in Negros is in turn brought to the island of Panay. That is how the interconnection of the Visayas grid looks like – the maze starts from Leyte and ends in Panay.
The Power Crisis Scenario
For a couple of months now, there has been so much hullabaloo about the alleged power crisis in the Visayas. The government led by the Department of Energy has been floating this looming power crisis in the region.
What is highlighted is that Panay, as the island in the tail-end of the grid is seemingly in the brink of a dark and gloomy situation in a matter of a few months.
There are several IPPs (Independent Power Producers) that have already signified their entry in Panay. What we fear is that there will be no critical evaluation of the entry of these IPPs in the region and we end up with so much excess energy. What government officials should also consider is the impact of these to the rates of electricity.
Currently we are being burdened with high power rates and mainly because of the PPA (Power Purchased Adjustment), which is actually energy we are not using but we continue to pay. Indeed, this is the biggest irony of all, while we are paying so much for undispatched power; the government is now floating this power crisis scenario that there is an impending power shortage!
Exaggerated Facts
Now, with the blind acceptance and in fact the peddling of our very own local government officials of this clear exaggeration of facts, in the very near future we may be paying for more unused electricity.
The current peak demand in Panay Island as of June 2003 according to the DOE is around 175 MW. DOE has since released very optimistic annual peak demand projections that are practically based on very optimistic assumptions.
A look at the GDP data of Western Visayas will reveal an entirely different picture. Our real regional GDP was 3.6% for 2001 and 5.0% for 2002. There is no iota of indication that our regional and even the national economy will perk up to manifest highly optimistic GDP figures.
Further, the foundation of the region’s economy is agriculture and services. These economic inputs are not characterized by a high requirement in energy much more an instant surge in power demand compared to regions whose economy is based on heavy industries and manufacturing.
What is clear now is that this power shortage scenario that is floated is being blown out of proportion. Essentially these moves are aimed to condition the minds of the Ilonggos (local residents) to readily agree to the admission of numerous IPPs in the Island and eventually accept higher electricity rates.
With higher power rates, the selling of NPC assets will be more attractive to prospective investors who are encouraged to invest in the government’s privatization program.
New IPPs
Surely, if there will be no improvements either in the transmission and the generation sectors in the next five to ten years, indeed, there will be a shortage but the scenario is not as gloomy as that being painted by the DOE and their IPP friends. This is clearly a scare tactic and it serves the interests of these greedy IPPs.
There has been so much false or exaggerated information peddled around. And no less than the Governor of the Province of Iloilo endorsed the fast-tracking of the entry of new IPPs in the region to address the hyped crisis.
Several IPPs have indicated their intention to enter the region. Currently, the most controversial is the apparent entry of a Korean owned company, KEPCO (Korean Power Company). President Macapagal-Arroyo backs the project and has signed a Memorandum of Agreement (MOA) with KEPCO officials during the former’s visit to South Korea earlier this year.
KEPCO proposed to build a 100 MW coal-fired power plant in the region, which according to it amounts to $150 M investment.
KEPCO and its government backers has lured the public especially the host communities in Ajuy, Iloilo and currently in Banate, Iloilo with jobs, infrastructure projects and citing only the advantages of putting up the plant. They fail to show the whole picture however.
What’s worse is that they have the nerve to give a 30-day ultimatum to the Municipal Council of Ajuy to sign the MOU (Memorandum of Understanding) they drafted with the threat of pulling out! And even before such ultimatum expired, KEPCO secretly signed an MOU with the local officials of Banate, Iloilo without the benefit of consulting its constituencies and behind the view of the media and the public.
The actions of the representatives of KEPCO smack with arrogance and their subscription to non-transparent processes and short cuts show what lies ahead if we allow this company to operate.
Local Efforts
The Iloilo Chapter of FDC has been in the power campaign for at least two-years. We have been active in articulating the position, perspectives and advocacies of the coalition in the power sector.
We have employed and still utilize various arenas of struggle and different forms of actions. We have been active in articulating our stand against the privatization of the power sector. FDC-Iloilo also have figured in engagements versus the power utilities in exposing their malpractices.
The latest of our efforts is the formation of a broad alliance opposing the entry of the KEPCO coal plant.
Last October 2003 several advocacy groups, NGOs, POs, and other public interest organizations including FDC-Iloilo banded together under the banner of RISE or the Responsible Ilonggos for Sustainable Energy. The RISE formation was in response to the apparent railroad approval of the entry of 100 MW KEPCO coal plant, here in the Province of Iloilo.
The formation is a welcome development as the group has been actively articulating the eventual effects of this coal plant to people’s health, the environment and its other long-term impacts.
RISE has also been instrumental in educating, organizing and mobilizing the communities that will be directly affected by the KEPCO proposed project. The support of the people in the communities in the campaign has been very significant in putting up a strong opposition.
Currently, RISE is actively opposing the project during the public hearings called by the Provincial Council of Iloilo, which up to now is still on going.
Short Term and Medium Term Alternatives
FDC and RISE stress that there is no need to open the floodgates for new IPPs as this will only increase the amount of unused electricity that in turn will lead to higher PPA and electricity rates, not to mention the environmental and social impact in the construction of these new plants.
The transfer of the 110 MW Pinamucan Diesel Plant from Luzon and the uprating of the transmission lines in the region is more than enough to avert the “shortage”. Improvement in the transmission sector and efficient linkages of the Luzon, Visayas and Mindanao grids is the key in rationalizing supply of power. In the short run the government can deploy power barges, gas turbines or diesel-plants from the huge overcapacities in Luzon.
FDC-Iloilo and RISE also underscore the fact that there are other alternative sources of renewable energy and that the Island of Panay has a big potential for hydro, wind, solar and bio-mass energy.
Long Term and Strategic Efforts
FDC-Iloilo has been actively articulating the coalition’s strategic calls and advocacies in the provincial and regional level. With its wide network of alliances, efforts are made to strengthen the unities not only in the level of environmental and health issues but on the effort to promote a broader anti-privatization perspective and analysis on the power industry.
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