The way forward for the Agus-Pulangi Hydroelectric Power Complex (APHC) has always been a polarizing issue.
The primary issue, however, is clean, affordable, and secure electricity for Mindanaoan electricity consumers. By consumers, we mean households, businesses, industries, and even government agencies.
The recent move of the Power Sector Assets and Liabilities Management (PSALM) to terminate the negotiations on the unsolicited proposal of the Mindanao-based company Greenergy Development Corporation for the rehabilitation of the APHC, which supplies around 20% of Mindanao’s energy needs at the cheapest rate, affirms that the national government doesn’t care about solutions to high power rates that could benefit the whole of the island.
If it proves anything at all, it is the corporate capture of the energy sector. By definition, corporate capture is a form of systemic corruption in which powerful corporations and economic elites exert undue influence over government institutions, policymaking, and regulatory frameworks. It prioritizes private profit over the public good, often weakening environmental, labor, and human rights protections.
Around 50 industries and over a hundred MSMEs in Mindanao are worried about this development because if PSALM awards the rehabilitation work and future maintenance of the Agus-Pulangi to a giant power player for P70 billion over the P35-billion proposal of the Mindanao-based company, it is certain as sunrise and sunset that the generation rate from the publicly-owned power plant would more than double its current rate of less than P3/ kilowatt-hour.
These industries were looking forward to tapping reliable and very affordable rates from a rehabilitated Agus-Pulangi even at a slightly higher rate of P3.11/ kilowatt-hour as publicly disclosed by Greenergy if the rehab work and future operations of the Agus-Pulangi is awarded to them. Industries and most MSMEs can qualify as contestable power consumers, which means they can choose their power supplier through mechanisms like Retail Competition Open Access (RCOA), the Retail Aggregation Program (RAP) and Green Energy Option (GEOP).
Investments in manufacturing have been stalled because of the island’s expensive power rates, ostensibly due to its overdependence on imported coal. Existing industries are holding off on expansions as expensive power rates eat so much capital. The socio-economic implications are dire. With less revenue from manufacturing, employment rates either stagnate or decrease, contributing further to more poverty incidence.
In terms of energy transition, nothing much can be expected from the proposal of that giant power company to rehabilitate and operate the Agus-Pulangi. Based on publicly disclosed information, they are not offering meaningful innovation that would hasten the energy transition in Mindanao. It would be more business-as-usual aside from doing much-needed repairs on the aging power complex.
We have to be reminded of the time when the government privatized the power barges in Nasipit, Agusan del Norte, and Maco, Davao Oriental, with a combined capacity of 200 MW in 2009. Once the power barges, which were fired when the water level at Lake Lanao was low, were taken out of the grid and initially operated as an ancillary power supply, Mindanao was in darkness and power rates shot up.
It is very possible that once awarded to a power monopoly which has stakes in coal, the Agus-Pulangi could be operated not as a baseload power plant, but as a peaking power plant. And here is the catch: the cost per kilowatt hour of peaking power plants is tenfold or more compared to baseload power plants.
The idea of the Greenergy proposal is to retain the baseload nature of the Agus-Pulangi and operate it in tandem with solar energy for more reliability. The bottom line would be a faster energy transition from coal addiction to cleaner, affordable, and secure energy for Mindanao.
The growing opposition to the supposed privatization of the Agus-Pulangi hydro has its merits. But that is not the be-all and end-all. The campaign has to offer solutions to secure wins for Mindanao.
Solutions that offer superior innovation with a broader value-for-money proposition for the whole of society, not just the pockets of the big power monopolies and a government captured by the interests of profit.
So here we go again! The recent development at PSALM, places Mindanao once again in a condition that can be described as ngitngit pa’s alkitran, itum pa sa ano-os. (darker than tar, blacker than soot.)
(The writer is a former newspaper editor. He is the project director of the Consumers for Renewable Energy Action in Mindanao and president of the governance and environment watchdog and think-tank Pinoy Aksyon Inc.)
