Brownouts

Largely ignored by the Manila-based media, Mindanao has been enduring rotating brownouts for weeks. The power outages sometimes last for eight hours each day, crippling production and causing economic dislocation.

Last week, flights to the Zamboanga airport were cancelled because of the outages. The onset of the dry season will probably take out much of the power supply coming from hydroelectric sources. That will only serve to worsen the situation.

The supply shortages should not surprise us. Three years ago, energy experts were warning of these shortages unless government moved quickly to bring in new capacity. Government, obviously, did not move quickly enough.

There are a few private investments in new power capacity in Mindanao — but they will not be ready until next year at the earliest. Then again, the new capacity might not even be enough to meet rising demand.

Power supply shortfalls threaten the Visayas as well. I have not kept up with the developments in the energy picture, but the last time I looked, the supply margins were thinning at an alarming rate.

The supply situation for Luzon is not very robust either. With a thin surplus, a major plant breakdown could throw us into darkness. We have seen this happen before.

Ensuring energy security is a tricky thing. We need to have a long-term strategic energy plan to ensure that we build the power plants we’ll need much farther down the road. The cheaper energy sources — such as hydro and thermal — require about 15 years gestation period before they become available.

Diesel powered plants are the quickest to build — but they also generate the most expensive power. New technologies enable us to use coal with less of the adverse environmental effects associated with this fuel source.

The reason we have such high power costs is bad planning. Many times in the past, faced with energy emergencies, we were forced to resort to building diesel plants. This produced a mix of energy sources that forced up power prices.

After the Cory Aquino presidency assumed power, a series of really destructive decisions were taken. These decisions shaped the present cost structure that harms our economic competitiveness and keeps many of our people poor.

The worst decision made by the Cory administration was to abolish the Ministry of Energy, the agency principally responsible for long-term energy security. Combined with the decision to mothball the Bataan nuclear power plant and the cancellation of the series of power-generating dams planned for the Chico River, this set of policy decisions produced the terrible power shortages that hit us by the late eighties.

With the economy on a tailspin, the Ramos government acted quickly to address the power shortages. Since power shortage was more expensive than any known generating capacity, the Ramos government attracted investments into diesel-powered generation and reluctantly accepted the take-or-pay conditions demanded by investors to ensure lower risks for their investments.

Our electricity cost structure today is one of the highest and most inefficient in the world. High electricity costs killed off our industries, forcing us to rely on the less energy-intensive services sector. If there is any single factor why we lagged behind our Asian neighbors, it is the cost of power we are forced to endure. This is the curse of the Cory years.

The unhealthy economic consequences of very high electricity prices explain why so many Filipinos are poor. High electricity prices stood in the way of building a dynamic industrial core for our economy similar to what our neighbors managed to evolve. That is our strategic economic weakness.

High power costs skew personal and family expenditures. For instance, I live in a small flat with no air-conditioning at all. I use LEDs as much as possible. Yet each time I go to pay my monthly power bill, I weep a little.

If power costs were lower, Filipino families will have more disposable income for better nutrition and health care, and more savings that could convert to investments. Because power costs are impossibly high, every other aspect of our national economy is distorted. That is the curse of flawed energy planning, the most salient feature of our weak state.

The creeping brownouts now endured in Mindanao will grow worse before things get better — if they get better at all, considering the seemingly laid-back attitude of this administration towards the looming energy crisis.

The creeping brownouts bring back the nightmare of the late Cory years. During that time, the national economy contracted massively because of the power shortage, bringing millions of Filipinos back to the fold of poverty.

Our power infrastructure is the weakest link in our efforts to achieve a robust and competitive economy. It is the biggest hindrance to bringing down poverty rates. It is the biggest impediment to investment flows that might help us rebuild our industrial base.

The modernization of our power infrastructure ought to have been Item Number One in this administration’s to-do list. It is the key link to ensure our people’s wellbeing. Yet it was never mentioned in the two State of the Nation Addresses of this President.

That, we now see, has been a telling silence.

Now that the term “Noynoying” has gone viral, the Palace is exerting every effort to picture the President as being constantly at work. This includes that rather funny photo release showing the President lifting thick folders of paper.

Palace propagandists should be reminded this President was not elected to do heavy lifting. He was elected to provide us a plan for the national future, most urgently a plan for our national energy future so seriously undermined by his mother’s shortsighted policy decisions.