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.
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.
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?
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.
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.
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.
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.
* 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.
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!