Mike BaÑos

The Power Sector Assets & Liabilities Management Corporation (PSALM) should be more forthright with the people of Mindanao when it explains its alleged losses in operating the government’s power facilities in Mindanao.

To be fair to PSALM President & CEO Mandy Ledesma, it may be the language with which PSALM’s report was couched by a national broadsheet which could mislead the greater portion Mindanao residents not familiar with the big picture.

A report in a national broadsheet said PSALM incurred losses “amounting to as much as P15 billion from 2001 to 2011 from operating the government’s power facilities in Mindanao.”

The report said PSALM disclosed the figures “to belie allegations that the government has been generating profits from its electricity sales in Mindanao, as well as to ensure the “utmost transparency to all relevant sectors as to the actual financial position of the Mindanao plants’ operations.”

Fine. At this point, the reporter should have clarified that the allegations of reported profits referred merely to the operations of its hydropower facilities, specifically the Agus and Pulangui hydroelectric complexes.

In fact, later in the same report, Mandy is quoted as admitting the operation of Agus-Pulangui resulted in operating profits, and the losses from the operation of its coal, geothermal and diesel-fired plants.

In this context, the common contention of the people of Mindanao to stop the sale of the Agus-Pulangui complexes gains further merit. Why indeed sell off the crown jewels of Mindanao Generation when it is earning profits for the government and get rid instead of the contracted capacities of non-hydro facilities?

To quote the very same report: the government still owns and manages the contracted capacities of several power facilities in Mindanao including a diesel fired power barge in Davao, Southern Philippines Power Corp.’s (SPPC) Bunker-C fired power station in Sarangani; and Western Mindanao Power Corp.’s (WMPC) diesel-fired generating facility in Zamboanga City.

PSALM Pres. Mandy Ledesma is further quoted as saying how the losses from these other facilities significantly exceed the revenues generated from the hydro plants, so much so that “the cost of producing electricity from these facilities is more than the time-of-use rate imposed on Mindanao consumers.” Ergo, the revenues generated from the hydro plants are being used to cover the operating losses from these facilities.

Entonces, all the more reason not to sell them off when they are so profitable. Why not do something about these contracted capacities instead of selling off the very institutions which are keeping them afloat?

PSALM has almost finished selling off the crown jewels of the former Napocor’s generating facilities in Luzon and the Visayas at fire sale prices and leaving it with losing dilapidated facilities which have now become an albatross around its neck. Should it continue pursuing this strategy when it has already dismally failed to attain the objectives of privatization in the first place?

PSALM was quoted as saying it sources capacity from the non-hydro facilities to meet the demand of Mindanao consumers in view of the limited and intermittent supply from the hydro plants. Mandy is further quoted as saying the capital expenditures incurred for plant maintenance and rehabilitation have not been taken into account in the calculation of the plants’ operating income.

These two items are related: as the Napocor personnel manning the hydro facilities themselves admit, the “limited and intermittent supply” is directly caused by the PSALM’s failure to provide or their maintenance and rehab allegedly because PSALM’s mandate is to “sell off, rather than maintain and rehab” the remaining generation and transmission assets of Napocor.

Now you, as a resident of Mindanao have these facts in their proper context, do you agree to still sell them off as some people in government and the private sector are so determined to do now? In our next column, let’s look at why these guys are so determined to sell of Agus-Pulangi and connect the Mindanao Grid to Luzon and the Visayas.

(Mike Banos is a free lance writer and journalist who has been covering the energy beat for the last 12n years. He is the president of Konsumanteng Kagay-anon, Inc., a consumer welfare and advocacy group which successfully intervened in the Energy Regulatory Commission for lower distribution rates in the Cagayan de Oro franchise area for the next four years).

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