Tag Archives: Power

[Press Release] Electric consumers with CSO protest in front of ERC and Meralco main office to expose Meralco’s anomalous ‘sweetheart’ deals over its PSA applications

Electric consumers with civil society organizations protest infront of Energy Regulatory Commission (ERC) and Meralco main office to expose Meralco’s anomalous ‘sweetheart’ deals over its power supply agreement (PSA) applications.

Photo by FDC

Led by the members of the Power for People Coalition (P4P), Sanlakas, the Freedom from Debt Coalition (FDC), the Philippine Movement for Climate Justice (PMCJ), and the Center for Energy, Ecology, and Development blasted Meralco for virtually “dealing with itself” by entering into PSAs with companies which it has large shares of.

“With a contribution this big, this company must have strengthened its commitment to be faithful to its consumers in solving our energy crisis. However, it seems that they have been fooling behind our backs together with their ‘sweethearts’,” said Butch Junia of the Power for People Coalition.

Meralco’s ‘sweetheart’ Companies

The current Electric Power Industry Reform Act of 2001 (EPIRA) allows distribution utility to contract with affiliated generation companies at 50% of its total demand. However, based on Meralco’s 2016 Annual Report, its PSA partners are actually their subsidiaries, associates and/or joint venture partners.

Thru MGen or MERALCO PowerGen Corp., Meralco’s fully owned subsidiary, has major investments in Atimonan One Energy (A1E); 50% in St. Raphael Power Generation Corporation (SRPGC); 49% in Mariveles Power Generation Corporation (MPGC); 47% in Redondo Peninsula Energy Inc (RPE); and 14% in Panay Energy Development Corporation (PEDC).

“This is nothing but a clear connivance between Meralco and the said generation companies—a deal made out of mutual benefits and equal exchange of favors, just like how ‘sweethearts’ do,” said Erwin Puhawan of the Freedom from Debt Coalition (FDC). “If the PSAs would push through, Meralco would have freedom to exercise influence over the cost of both the generation and the distribution of electricity,” Puhawan claims.

Meralco’s continued betrayal to the people

“What is clear is that consumers will end up carrying the cost of these incestuous deals, with Meralco profiting from both ends of the power sector,” said Gerry Arances of the Center for Energy, Ecology, and Development. “This undermines any semblance of commitment by the government to increase energy access in the Philippines, and will only reinforce the electricity oligarchy in place in the country’s energy sector,” Arances said.

Out of the total 592 PSA cases reported by ERC as of February 2017, 30 cases were Meralco applications giving them the biggest amount of shares.Meralco has responded negatively to these accusations saying they are being singled out from all the companies who submitted their PSA applications; which was then immediately answered by the protesters claiming that Meralco is playing the victim card.

“We are not singling them out. It is true that there are 90 applications submitted and only 9 of them are from Meralco but we should take note that in terms of demand it is 3,551MW out of a total of 4,500MW, making it 78% of total demand. That means that 7% of total PSAs own 78% of total demand,” said Sanlakas Secretary General Atty. Aaron Pedrosa.

Groups also added that it is very unusual and worrisome that this had gone unnoticed with ERC seemingly unconcerned. “We urge the ERC to slam the PSAs and break up this abusive relationship between Meralco and consumers,” Pedrosa said. “We cannot have a relationship based on lies,” he added.

Meanwhile, PMCJ National Coordinator Ian Rivera said that these partnerships can make or break our environment’s future. “These sweetheart deals are mapped-out destruction of our environment bringing us 5 steps backwards in achieving sufficient, affordable and clean energy,” Rivera added.



GERRY ARANCES, CEED: 09778406098
IAN RIVERA, PMCJ: 09174746178
ERWIN PUHAWAN, FDC: 09328726174

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[People] The power problem: a Shell-driven crisis by Walden Bello

The power problem: a Shell-driven crisis
Walden Bello
November 22, 2014

When Malacañang asked Congress for emergency powers to address a power crisis that it expected in the summer months of 2015, the impression given was that the country was facing a massive demand that would outrun available supply. In its request, the administration invoked Article 71 of the Electric Power Industry Reform Act (Epira), which states that the chief executive, “upon determination of a shortage of supply of electricity, may ask Congress for authority through a joint resolution, to establish additional generating capacity under such terms and conditions as it may approve.”

Walden Bello word.world-citizenship.org

Not surprisingly, both the public and lawmakers felt that indeed the country would be facing a national emergency come early 2015.

Crying Wolf

However, from the hearings conducted by the House Committee on Energy on October 19 and November 18, the officials of the Department of Energy (DOE) were forced to admit that: 1) the so-called crisis was based not on projections that the demand for electricity in the period would exceed supply or available capacity but that meeting the peak demand would cut into and bring down the required reserves of electric power that must be maintained; and 2) that what would bring down reserves below the critical level would be the shutdown of the Malampaya natural gas fields for maintenance from mid-March to mid-April 2015.
Malampaya’s gas feeds into into three Luzon power generators–Sta. Rita, San Lorenzo, and Ilijan–so that a shutdown from maintenance would withdraw over 1000 MW of installed capacity.

While the Department of Energy has factored unexpected power outages in its projection of power supply, the key factor behind the expected shortfall is Malampaya’s temporarily going out of commission for maintenance and upgrading by its operator, Shell Inc.

A Shell-driven artificial crisis

Thus, as the House hearings revealed, the so-called crisis was not one of demand exceeding supply but one brought about by the decision of a transnational corporation to conduct its maintenance at the time of the year when demand is greatest, thus creating an artificial deficit not in available generating capacity, as the public was led to believe, but in required regulating reserves. Moreover, the deficit in required reserves would disappear if Shell were to move its maintenance to later in the year, when peak demand would be lower and more capacity would come onstream with new power plants becoming operational.

In response to questions from members of the Committee, DOE personnel said that, in fact, the scheduled maintenance could take place later in the year, as in November or December. Shell, however, wanted to undertake maintenance in March and April, when the seas are reportedly calmer.

This did not strike some members of the Committee as a good excuse, since the last time Shell did maintenance on Malampaya was during the latter part of the year, from November to December 2013. Moreover, for an oil company that is used to doing maintenance and expansion work in the most adverse conditions in the Arctic and the North Sea, having rough seas does not count as an excuse. Pressed, DOE personnel admitted that the executive could in fact tell Shell to conduct its upgrading and maintenance later in the year, and that Shell, in fact, admitted this.

So why could the DOE not press Shell to do its maintenance work on Malampaya at a more suitable time for the country that would eliminate the need for giving the president emergency powers to fill a projected reserves deficit? The question did not receive a satisfactory answer, though DOE Secretary Jericho Petilla did make a contorted effort to explain. Shell’s presence at the hearings could have given lawmakers a chance to come to the root of the problem, but for some reason the request made by the legislators for the DOE to have Shell present at the Nov 18 hearing was not acted upon. They then voted without having heard a word from what one congressman characterized as the invisible but most critical actor in the whole affair.

A triumvirate of foreign players

Shell is not the only transnational giant whose behavior has had a negative bearing on our energy security. Indonesian-owned Meralco will be at the center of the Interruptible Load Program (ILP) that will provide the substitute generating capacity withdrawn from the grid during should the House grant the president emergency powers. Under ILP, enterprises that have their own generating sets will voluntarily withdraw from the grid so as to allow other consumers access to power that would otherwise go to them. Since it distributes some 70 per cent of electricity in Luzon, it is unavoidable that Meralco, one of the most abusive monopolies in the country, will be a key player and thus be one of the recipients of the massive government subsidy for private sector participants that the proposed law would authorize to put the ILP system in place.

To Shell and Meralco as foreign players with a negative impact on our power system, one must add the National Grid Corporation of the Philippines (NGCP), which operates the National Transmission Corporation that monopolizes the transmission of electric power throughout the archipelago. NGCP is a private entity that is controlled by a Chinese state firm, the State Grid Corporation of China. During the hearings, conflict between the DOE and the NGCP broke out in the open when the DOE complained about the lack of accurate data on power capacity from NGCP.

The secretary of the Department of the Interior and Local Government (DILG) earlier complained about the very slow transfer of technology from Chinese operators to Filipino technicians in the system operator. Most important is the question: with our country having serious territorial dispute with the People’s Republic of China in the West Philippine Sea, is it acceptable from the perspective of national security that our transmission grid is in the hands of a Chinese state corporation that responds primarily to the interests of the Chinese state?

This possibility might presently be remote, but one cannot discount a scenario wherein on orders from Beijing, NGCP could literally bring the country to its knees owing to its monopoly over power transmission.

The real challenge

The debate over the granting of emergency powers to the president has not only exposed the unhealthy impact of foreign entities on our energy security; it has also revealed the vastly diminished role of the government in managing the national energy system.

Planning has fallen by the wayside, with the government now reliant on individual corporate players’ plans, based on profitability, to introduce new generating capacity to meet rising national demand. Secretary Petilla admitted as much when he said the ability to meet rising demand was dependent on private players’ promises on when their new units would go online. Indeed, the government’s ability to forecast demand is now largely dependent on data provided by private sector players.

What we are experiencing is the fiasco brought about by the indiscriminate grant to the private sector of most of the power to manage and operate the country’s energy system by Epira. Epira is a domestic monument to the illusions of privatization that were shredded by the global economic crisis that began in 2008.

Instead of more efficiency, lower prices, and more competition, Epira has delivered higher prices, oligopoly, and a less efficient system.

Replacing or fundamentally amending the dysfunctional Epira is what Congress should be doing, not addressing an artificial crisis created by a foreign transnational. Unfortunately, the likely result of what is now the inevitable granting of emergency powers to the president will be to delay even more addressing the central challenge to meeting our energy security. I am willing to bet that despite much populist rhetoric from members of Congress, the 16th Congress will not tackle Epira reform.

*Walden Bello represents Akbayan in the House of Representatives, where he is a member of the Committee on Energy.

Source: http://opinion.inquirer.net/80348/the-power-problem-a-shell-driven-crisis#ixzz3JniFxAiM
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[Press Release] Workers blame government for new power emergency -PM

Workers blame government for new power emergency

For doing nothing during the last four years, a second power crisis is materializing under the watch of the second Aquino, the labor group Partido Manggagawa (PM) said in a statement.


“Had the government acted in advance, one of which was going back into generation as recommended by the 19th EPIRA Status Report of 2011, the President would not have been begging for emergency powers from Congress which the same body that enacted the failed Electric Power Industry Reform Act (EPIRA) in 2001,” said PM spokesperson Wilson Fortaleza.

Fortaleza said that as early as 2010, red flags on the supply side have already been raised by experts and by the government itself. Even the labor sector under the coalition Nagkaisa! had been calling on the government since 2012 to decisively address the twin problems of high cost and diminishing power supply.

“Yet the government opted to stay in the sidelines, waiting for the promised megawatts from private players to come online. But to no avail,” lamented Fortaleza

“Now PNoy has placed himself in a situation where his mother once failed: Presiding over a power crisis in a panicky and very costly manner,” explained Fortaleza.

The group said that since there is no more time to build an additional 600-700MW capacity to fill in the annual deficit beginning next year, the government is left with no option but to revert back to provisional and very costly mode of power contracting, similar to the notorious IPP contracts done by the Aquino and Ramos regimes.

“These instant, palliative solutions will bring us, poor consumers, more pain,” said Fortaleza.

But before Congress expressly grant PNoy emergency powers, the group said it is but judicious to declare first that EPIRA and privatization failed.

Second, the group said an audit of all the plants’ capacities as per contracts must be done first to determine the actual numbers since there are reports that power plants are not running on their full capacities or are not properly maintained.

Third, Malacanang must also show the real cost of the planned contract that it will enter into, for how long, to whom, and the actual terms it is willing to commit.

Fourth, with or without emergency, the government should strongly push for a shift to renewable energy.

And lastly, emergency powers must not be granted to the Executive if it has no clear, effective and doable plan to strategically address this oppressive, decade-old energy crisis.

Partido Manggagawa
16 September 2014
Contact: Wilson Fortaleza

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[Statement] Secretary Petilla, Do your homework first, otherwise resign!!! -Power to the People Coalition


Secretary Petilla, Do your homework first, otherwise resign!!!

The recent statement of Secretary Jericho Petilla asking the President to exercise emergency powers to solve the current energy crisis is a dire attempt to excuse his inability and ineffectiveness in solving the problems in the power industry.

power to the people coalition

We would like to remind Sec Petilla that before he use section 71 of the EPIRA law ,he should have gone first to section 37, powers and functions of DOE, which requires him to submit to Congress not later than the 15th day of September of every year the Philippine Energy Plan which (b) “shall provide for integrated and comprehensive exploration, development, utilization, distribution and conservation of energy resources, with preferential bias for environment-friendly, indigenous and low-cost sources of energy.” Section 37 (i) specifically mandates DOE to: “Develop policies and procedures and, as appropriate, promote a system of energy development incentives to enable and encourage electric power industry participants to provide adequate capacity to meet demand including, among others, reserve requirements.”

We shudder at the thought that he has been writing and making our policies to promote a system of energy development incentives to encourage participants to provide adequate supply of power. What exactly are those policies and incentives?

For one, has he looked into the asymmetry in the industry with Meralco being the biggest buyer and a monopsony, especially one that has interests, even if supposedly capped, in the generation and supply sector.With the highest electricity rates, why are we not drawing outside interest and new investments in the power generation.Quite the contrary, Meralco just invested millions of dollars in Singapore. Should this not be a matter of interest to the DOE Secretary?

Given this clear mandate and the emergency we are now in as very publicly declared by Petilla, his failure to fulfill his mandate must be the biggest crisis of the energy sector and the power industry. Petilla like EPIRA is a failure! His inability to submit the required plan is just one of the indicators of his ineptitude.

In other words, before Petilla goes to the president to spin tales of a crisis and make the beleaguered President into a white knight, he should face the public and explain why his Philippine energy plan failed to anticipate and plan for the generation/supply shortfalls and why his power development plan did not have the programs and policies to lure investors into generation. He should do his homework first! Otherwise he should resign from DOE.

After showing that the imminent crisis is beyond control and influence of prudent planning and responsive policies, only then can he bring up section 71 with the president. Otherwise, Petilla will be no different from Abad, who has apparently painted the president into the DAP corner. Petilla will be no different from Abad, who has implemented the DAP. We will not be surprised too, if Pnoy, just like what he did to Abad, will defend Petilla to high heavens and assert that his recommendations for emergency powers for the President will be an “act of good faith” and for the good of the people.

The rising prices of electricity including the crisis was brought about by corporate greed and privatization of the power industry though the passage of EPRA law. The failure of EPIRA to solve the power crisis only strengthens the call to repeal it and push for alternative sources of energy.

We should dismantle EPIRA and pave the way for the rapid development and shift to sustainable, accessible, safe and renewable energy systems that the people-especially the poor and the communities in the off-grid areas can truly enjoy and benefit from. The government should undertake immediate and massive public investments in the immediate and rapid shift and transformation of our energy systems.

25 July 2014
Contact Person: Erwin Puhawan
Mobile No. 0932-872-6174

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[Video] Kuryente Kong Mahal (Part 1) – www.fdc.ph

Uploaded by fdcvideo on Sep 8, 2011

TEN YEARS since the passage of the Electric Power Industry Reform Act (EPIRA), its promise of affordable and accessible electricity to all through privatization and a leveled playing field in the industry has turned into its complete opposite.

Read more