Privatized power industry to blame for power shortage

News Release
February 19, 2010

Privatized power industry to blame for power shortage

Instead of mapping out a long-term energy plan and setting up new power plants to meet growing needs, government been pre-occupied with selling off its power assets as part of the Electric Power Industry Reform Act (EPIRA). It is now wonder we are heading for a power crisis, said the umbrella group Bagong Alyansang Makabayan (Bayan).

“What the EPIRA has done is to make the national government pre-occupied with selling its power assets to raise revenues and pay off debts. The government then has been utterly dependent on foreign investors who are expected to build new power plants. But if there are no investors because of the low tariffs in the country, how will government meet the rising power demand?” said Bayan secretary general Renato M. Reyes, Jr.

“The energy security of the country has been entrusted to private firms, mainly foreign. At this crucial juncture of our history when we will be having automated national elections, government seems to be groping in the dark as far as the power crisis is concerned,” Reyes said.

Bayan warned that emergency contracts with power firms will come at a steep price as was the experience during the power crisis during the Ramos administration. During this time, the Ramos government entered into contracts with independent power producers which resulted in the onerous purchased power agreements (PPA). Consumers reeled from the PPA in succeeding years because this formed more than half of the electricity bill. The group said to expect higher rates in the near future.

“Government has no foresight and no will to address the needs of the country. It has chosen the grossly unreliable tact of attracting foreign investors to address a strategic need. To make the country attractive for power investors, government also has to raise power rates and give onerous guarantees such as the PPA,” Reyes said.

“What happened to the Philippine Energy Plan? Why is the country suddenly left without any back-up power at this crucial period leading up to the elections?” he added.

Bayan said that for all intents and purposes, the EPIRA has failed to bring down rates and ensure energy security for the country, eight years after its approval by the Arroyo regime.

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