FAA OnLiNe

Friday, December 02, 2005

BLACKOUT LOOMS





PPC bleeding due to Peco rate cut

By Francis Allan L. Angelo

THE looming power blackout in Iloilo City is becoming real as independent power producer (IPP) Panay Power Corporation (PPC), is reeling from over a hundred million pesos in losses as a result of the Energy Regulatory Commission (ERC) order reducing Panay Electric Company’s (Peco) power rates.
In the last two months, PPC has lost P250million in revenues as Peco has passed on to the said power producer the ERC-sanctioned rate reduction. PPC operates a 72-megawatt diesel-fired power plant in LaPaz district.
Arman Lapus, Mirant Global Corporation vice president for Visayas New Business, yesterday said Peco virtually charged to PPC the P2 rate reduction by paying less than what is stipulated in their power supply agreement.
To stress his point, he said that "what we collect from Peco now is not even enough to pay for our fuel. That has been our situation for the pass three months and I am not even talking about other operational cost," Lapus said.
He added PPC can absorb the losses until December only. "If nothing happens for us this December, then we have no choice but to shut down the plant."
Along with the erratic movement of oil prices in the world market and the peso-dollar rate Lapus said PPC’s operations have been severely affected by Peco’s sudden rate cut. And if the bleeding continues, Iloilo City might a power blackout during the Christmas season.
Lapus said what they are spending over P4 per kilowatt-hour for fuel alone but Peco pays PPC less than P4.
Meanwhile, Lapus confirmed the pending petition with the ERC to revalidate Peco's power purchase agreement with PPC. The hearing for the said petition is scheduled on December 6, 2005 in Iloilo City.
Lapus said there is a need to return to the old Peco rate to sustain the operation of PPC and avert a possible power blackout in the city.
“Since PPC operates a diesel-fired power plant, our operations are influenced by oil price and inflation and which we pass on to Peco. We have a fixed rate which moves depending on market forces which is normal in the energy industry. But we don’t make money from the adjustment due to price of diesel, we pass it to Peco which in turns passes it to the consumers,” Lapus said. Lapus said they want to return to the old Peco rate "to ensure the availability and reliability of power in Iloilo City.”
“We are going around Iloilo gain the support of various sectors to go back to the old rate because it will allow us to continue running the plant. With the existing rate, we cannot (operate the plant). We have to stop the bleeding or else we might not sustain our operations. We want to hold on for the consumers but we just can’t do it at the present rate,” Lapus said.
Lapus added PPC’s rates cannot be pegged to what National Power Corporation (Napocor) is charging other distribution firms “since its rate is a mix of many sources like geothermal, hydropower and diesel and is subsidized by the government.”
Engr. Adrian Moncada, Mirant assistant vice president for Visayas, said Peco cannot rely on the debt-saddled Napocor for power supply as Iloilo province has been suffering from rotation brownouts the past months.
With Panay at the tailend of teh Cebu-Negros-Panay power grid, Ilonggos still cannot rely on Napocor for power supply due to the limited capacity of Napocor's submarince cable connecting Panay to Negros.
Moncada added private power producers have no choice but to increase their rates since “we do not enjoy subsidy from the government.”
Under the Electric Power Industry Act, 70 percent of Napocor asset will be privatized by the end of this year.
But so far, Napocor has only disposed 14 percent of its plants which prompted Energy Secretary Raphael Lotilla to extend the privatization program to March 31, 2006.
Slated to be privatized are the Pinamucan plant now based in Dingle, Iloilo, the Palimpinon hydrothermal plant in Negros Island and the power plant in Tongonan, Leyte.
Lapus also asked the support of the public in the return to Peco’s old rate “because we are all involved in this concern.”
“If we shut down the plant, there will be no power which I don’t think everybody wants,” Lapus said. (Published in The Guardian-Western Visayas, December 1, 2005)





Militants ‘hang’ selves on Boni day

By Jeehan V. Fernandez

In a novel and traffic-snarling manner of expressing dissent against the government, members of labor and urban poor groups hanged themselves near a mall at LaPaz, Iloilo city yesterday during the commemoration of the birth of national hero Andres Bonifacio.
The innovative protest-rally caught the fancy of shoppers, commuters and plain kibitzers who saw three persons – two males and a female – dangling the overpass of Gaisano City Mall yesterday morning.
The three were members of Bukluran ng Manggawang Pilipino and Partido Manggagawa.
To make a realistic dramatization of the hanging and also for the safety of the protesters and commuters alike, the organizers employed harnesses used by mountain climbers.
In a statement, Bukluran ng Manggagawang Pilipino (BMP) chairman Zaldy Yebra stressed that hanging symbolized the workers’ sad plight under the “pro-capitalist atmosphere in the country."
“The Philippine labor sector is treacherously under attack on all fronts. We are being assaulted by the grave impact of the policies of trade liberalization, globalization and General Agreement on Tariff and Trade of World Trade Organization (GATT-WTO). We are also pounded by continuous repression of labor rights and welfare,” Yebra said.
“The workers’ situation in the country is at its worst,” he noted.
Yebra added “with the prevailing wage rates ranging from P200 to P325 while the daily cost of living for a family of six is estimated at P681, workers can barely survive.”
“The government’s package of non-wage benefits to enable workers cope with the grueling economic crunch is inadequate and arbitrary,” he clamored.
For the protesters, hanging does not only symbolize death but also the shame to the condemned man and his family.
But it seemed the protesters themselves could not stand the heat and strain of hanging in the air as they requested to be lowered to solid ground from time to time. The female protester even fainted out of sheer exhaustion. (Published in The Guardian-Western Visayas, December 1, 2005)

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