DEVELOPMENTAL POWER

by Atty. IMMANUEL L. SODUSTA

WHY ALL THE FUSS ABOUT
POWER/AKELCO?

Power industry is undeniably one of the biggest and most impor-tant now. This is the reason why big conglo-merates like San Miguel and Aboitiz are into it and continue to invest in this industry.

That is also the reason why many are now interested in this industry even in the Province of Aklan, because while it may be unknown to many, Aklan Electric Cooperative (AKELCO) has more budget than the Province. For the year 2009 AKELCO’s budget is more or less 1.2 billion pesos while that of Aklan is only 800 million pesos. Of course, the bulk of the expense goes to payment to the power generators and that is where many "investors" are interested.

Many believes that Republic Act No. 9136, the Electric Power Industry Reform Act (EPIRA) was passed to further the interest of the few that are involved in the power sector. It was conceptualized that the power generation, which was the function of the (National Power Corporation) NAPOCOR, a government entity, be privatized. The process was to slowly sell the generating plants of the NAPOCOR and for the power players to put up their own generating plants, the IPPs (independent power producers).

Considering that the power companies will be contributing so much good to our country by investing in the power generation industry, the EPIRA provides for a safety measure where they are not to lose. This is where the Minimum Energy Off Take (MEOT) was con-ceptualized. In essence, the MEOT is the minimum energy the power generator has to sell to a distribution company like the AKELCO so that the power generator will not lost in its investment. Before a power generator starts the construction of its plant, it has to contract with a distribution company for the latter to buy its power. It is provided by regulations that in the contract it will state the quantity of the power to be purchased and the minimum that the distribution company has to purchase. The MEOT has to be stated particularly if the distribution company has other sources of power as it may happen that the distribution company will get only so much power and the generating company will not be able to recoup its investment.

It appears therefore that our regulators are more concerned on the success and profit of the generating companies than the customers of the distribution companies. One reason posited by the regulators is that the investors will not bring in the needed infrastructure for the generating plants if they are not assured of at least a return on their investment. Foreseeing the lack of power, it was deemed necessary to put in measures to also protect the investors.

With our experience and with what is now happening, is the measure really necessary? Were the investors in power generators merely protected or were their pockets fattened?

From the number of companies wanting to enter into the power industry, one can only surmise that it is indeed a profitable undertaking. Even in Aklan, so many are interested to come in and put up generating plants. Newspaper articles are replete with announcements regarding a power plant here, a bio mass generator there, a hydro power application and start of construction in Libacao and in Madalag. Even the Department of Energy approved wind power source in Nabas or Buruanga.

When these power companies, if ever, start their operations will the regulators again impose the minimum off take so that they will not lose? Are they really investments or will they be just legalized schemes to scam the unsuspecting consumers who will eventually pay for their investments?
All is not lost for the consumers though. The Energy Regulatory Com-mission is supposed to be its guardian. It sees to it that the charges are reasonable and within the bounds of the regulations set up by our policy making congressmen. However, as between the giant conglomerates involved in power with all their lobby money and the hapless consumers, it is easy to believe that favor will always tilt in favor of the big companies. Good that the Province of Aklan has a power consumer watch group, at least on the level of the distribution company the irregularities may be "watched". To be more effective, however, the overall picture has to be taken into consideration. There is still the transmission company, the generating companies and even the regulating body that have to be "watched". /MP