GMA: Erap to blame for Ramos PPA mess!

MERALCO VS NAPOCOR: The National Power Corp. (Napocor) must be desperate for excuses for its monumental mismanagement of our power system that it has gone down to blaming even its valued customers for the soaring price of its electricity.

To deflect the flak over Napocor’s bloated PPA (purchased power adjustment) charges, president Asisclo Gonzaga of the power firm’s National Transmission Co. (Transco) tagged its biggest customer, the Manila Electric Co. (Meralco), as the ìreal problemî in the PPA issue.

Gonzaga blamed the high cost of electricity in the Meralco area to what he said was the distributor’s over-contracting of its supply. He pointed to Meralco’s IPPs  First Gas in Sta. Rita and San Lorenzo in Batangas City, and Quezon Power in Mauban, Quezon  as the source of overcapacity.

He added that the electricity from Napocor’s Ilijan plant, also in Batangas, is cheaper than that of Meralco’s IPPs.

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WORMS CRAWLING OUT: This spirited defense by Napocor-Transco’s Gonzaga should be welcomed by consumers and lawmakers looking into the power problem. The discussion rakes up issues hitherto unknown to the public.

For instance, the exchange has disclosed information that contracts signed by Napocor with 12 IPPs were consummated without approval of the Energy Regulatory Board (now a Commission). If this is true, who should answer for it?

The debate also brought out the fact that while Meralco has only two IPPs from where it buys a small part of its supply, the Napocor has over 40 contractors, some of them found to be operating below capacity yet collecting payment on the basis of full capacity.

Napocor’s paying for undelivered electricity has been blamed for the rising costs of electricity and its continuously sinking into debt.

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GAS LOWERS COSTS: Meralco has chided Gonzaga for glossing over the fact that it was Energy Secretary Francisco Viray (who was then also Napocor chairman) who required Meralco to put up two generating firms for a total capacity of 1,500 megawatts to ensure the development of the Malampaya natural gas fields.

Meralco did so in partnership with some foreign investors. First Gas is able to produce cheap electricity because it uses natural gas piped in from Malampaya.

Meralco belied Gonzaga’s claim that Napocor’s Ilijan plant sells its electricity cheaper  allegedly at P2/kilowatt-hour. How can this be, Meralco asked, when Ilijan is still being tested and has not gone into commercial operations?

If this claim is true, Meralco added, how come Napocor is selling its electricity as of March 2002 at P4.20/kwh?

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NO CHARGES THROWN: Why is President Gloria Macapagal Arroyo hurriedly clearing former President Fidel V. Ramos in connection with escalating electric rates? Nobody is accusing him of any crime yet, although the high rates have been traced to sweetheart deals signed with Independent Power Producers (IPPs) during his term.

What many consumers said was that Ramos, who created the IPP monsters, should sit down and help find a solution to the problem of power rates soaring at a time when there is an oversupply and Ramos’ IPPs are not even operating at full capacity.

If you believe horror stories coming from the provinces, some IPPs signed up during the Ramos administration do not generate any power at all but get paid in full for non-existent, undelivered power! The cost is passed on to consumers.

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FORCE MAJEURE?: It was premature for President Arroyo to have cleared Ramos even before the team investigating the IPP mess has filed its final report. Can the investigators now submit findings that do not jibe with the President’s views?

Put another way, can you imagine the Sandiganbayan clearing an accused even before the Ombudsman could file the information with the court?

It was unfortunate too that while GMA cleared Ramos, she tossed the blame to former President Erap Estrada who happened to inherit the problem triggered by the financial crisis that hit the region during his brief stint as president.

The explanation of GMA was that Ramos did his best in solving the power blackouts in the early 1990s, but that the regional crisis messed up his best-laid plans. We take it that GMA was invoking for Ramos a sort of force majeure.

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ERAP TO BLAME AGAIN: Part of the Ramos solution was the granting of contracts to IPPs with ìtake or payî provisions that guaranteed payment for their rated capacity even if they do not generate at full capacity or even if the electricity they produce, if any, is not delivered or used.

On the other hand, in blaming Estrada for today’s exorbitant cost of electricity, GMA explained that the actor mismanaged the economy and thereby failed to lift the country above the crisis spawned during Ramos’ time.

Ano ba yan? Estrada is being blamed for failing to solve Ramos problems? We’re no fan of Erap, but we think this is grossly unfair to the man. There was no issue over bloated electric bills when he was president.

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FVR’S REAR COVERED: Some senators want to summon Ramos (also Estrada) to their inquiry into the power mess because of his having fathered the IPPs that in turn gave birth to the hated PPA (Purchased Power Adjustment) that has doubled electric bills.

But we have not heard of anybody planning to file charges against Ramos.

The general was careful to cover his rear when he went around distributing IPP contracts. With blackouts (some of them lasting eight hours!) literally pulling the country back to the Dark Ages, Congress was forced to grant Ramos emergency powers to do what he thought was best.

With Ramos clothed with such extraordinary power, how can anybody sue him now for his official acts as president? Blaming his successor is much easier.

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DETAILED DETAILS: But for a micromanager like Ramos who is known to fiddle with detailed details and require meticulous staff work even for routine matters, we find it strange that he:

* Never thought of inserting into the IPP contracts a protective clause in case the IPPs failed to deliver.

* Never thought of putting a cap on how much the IPPs could charge for the power they claim to be able to generate.

* Never thought of measures to block IPPs who appear to have neither the track record, the capacity nor the intention to deliver what they will be paid for.

* Never thought of providing for such an eventually as a financial crisis or such disastrous situation that would leave the country hostage to IPPs.

Having been given plenipotentiary powers, it seems that Ramos threw caution to the wind as he merrily doled out juicy IPP contracts.

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SAFETY FACTOR OF 10: If he were designing or constructing a building (we trust that Ramos being a civil engineer would understand this), he used a safety factor of 10. Whatever was deemed safe under normal conditions he multiplied by 10 just to be very very sure.

That’s why we now hear some congressmen over the radio saying that where there was a demand of 10 megawatts, numerous IPPs were deployed for a combined capacity of 100 megawatts. Some of those redundant power plants are now reportedly idle – but they are being paid for non-existent demand and ungenerated power!

And GMA holds Ramos blameless.

For housewives and those who are not engineers, we might liken Ramos’ emergency solution to throwing the baby with the bathwater. Using another wornout metaphor, we might also say that if Ramos were a doctor he prescribed emergency treatment for a critically ill patient, but the cure killed him.

And GMA said Ramos should not be blamed. Amen. Since we also cannot blame either the Abu Sayyaf, the communists or Uncle Sam, the conclusion in the Palace is that Erap Estrada must be behind those soaring electric bills!

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