It’s no longer funny to call President Aquino’s administration a “student-council” government. Its incompetence will cost you and me— if the Supreme Court doesn’t rule Meralco’s steep rate hike for December illegal— lots of money, because of the unwarranted electricity expenses.
While the structure of our power industry is already so flawed that we will suffer the highest rates in the world, Energy Secretary Carlos Petilla played a big, stupid role in the spike in electricity rates for December.
Meralco had justified the hike by claiming that it had to buy power from the Wholesale Electricity Spot Market (WESM), which got to be expensive because of a sudden shortage of electricity in November. This was due, it claimed, to the scheduled and unscheduled shutdowns of several power generators. The shutdown of the Malampaya facility that had produced the cheaper natural petroleum gas also forced the system to use more expensive fuel, and therefore more expensive electricity.
But that’s not the whole story. The crucial question that has industry insiders shaking their head in disbelief: Why wasn’t the government-owned 650-megawatt Malaya thermal plant powered on? It might not have filled all of the demand required, but it would have reduced the shortage so that Meralco wouldn’t have needed to buy (or use as an excuse) — buy power at the WESM for an astronomical P33 per kilowatt-hour?
This has in fact been the role of the Malaya plant, which it has played every November and December in the past years, when generators and the Malampaya facility shut down for maintenance.
Malaya is in fact, according to statement early this year by the state-owned Power Sector Assets and Liabilities Management Corp. (Psalm) which owns it, designed to provide the “much-needed additional capacity for the Luzon grid when some of the island’s base load power plants are not producing either due to forced outages or preventive maintenance activities.”
Power industry sources in fact has been stunned at such government screw up that they even run simulations on what the average WESM price would have been from November 11 to December 10 last year (the period Meralco claimed they had to buy at high prices from it) if the Malaya plants were put on line. Instead of P22 per kilowatt-hour, it would have been 75 percent lower, at the normal P5.4, the level during the months before November when Meralco rates were steady.
In a meeting with CEOs of power generators Petilla called on Dec. 26 to discuss why there had been a power shortage in November, CMI Holdings President Isidro Consunji asked the energy secretary why the Malaya plant did not run.
Petilla reportedly surprisingly responded that he had the matter “investigated by the ERC (Energy Regulatory Commission). “
Petilla is the vice-chairman of Psalm, its chairman is finance secretary Cesar Purisima and the other board members are secretaries Florencio Abad, Arsenio Balisacan, Leila de Lima and Gregory Domingo. You read it right, the body heading Psalm are Aquino’s top officials.
Petilla as energy secretary is technically and in practice the big boss of Psalm, who orders it what to do. And he claimed he’d ask the ERC to find out why the plant his firm owns didn’t operate?
The truth is that Petilla forgot to order Malaya to run, or maybe, he didn’t even know that it could be ordered run so there wouldn’t have been any power shortage that Meralco would use as an excuse for its rate hike.
Petilla has been frantically trying to cover-up for his big boo-boo, spreading the fallacy that Malaya was also on a maintenance shutdown scheduled to end in October.
But in a November 4 coordination meeting among DOE officials, Malaya’s executives committed its first unit to run at 260 MW, and its unit 2 at 350 MW.
Or probably Petilla forgot that government had a Malaya power plant. After all he was so engrossed over the devastation of his home province Leyte that he had even vowed he would resign if the area still didn’t have power by Christmas. Or was it simply because his expertise as three-term Leyte governor just didn’t prepare him to grasp fast the intricacies of running a nation’s power system?
But surely, Petilla would have a deputy in charge of such crucial matters as ordering a power plant to run to prevent a power shortage.
Yes he has: Undersecretary Raul Aguilos, who was appointed to his post only September 28, 2013 by Aquino, who believed Petilla’s word that Aguilos would be perfect as energy undersecretary, after his career in the Land Transportation Office. He was for many years regional director covering the energy secretary’s home province in Leyte when he was governor.
You read that right, Aguilos’ career has been in the agency giving out drivers’ licenses and registering vehicles. His most important qualification for being appointed to his post was that he was Petilla’s kababayan (province-mate) and reputedly, for some reason, he was quite close to the energy secretary throughout his three terms as Leyte governor. Or maybe for some reason, as in the case of former LTO director Virginia Torres, Aquino is fond of appointing LTO regional directors to high offices.
If you still haven’t heard, that “KKK” label that has been stuck on this administration doesn’t just mean “Kaibigan, Kaklase, Kabarilan,” There is a fourth “K”, which means kababayan.
How the hell did we get to this? A pulitiko and his kababayan running our power sector, and their boo-boos to be charged on us? We shouldn’t be surprised.
Incompetents will be appointed by an incompetent, as long as they’re yellow.
This power rate hike is such a quintessential illustration of how Aquino and his KKK are ruining and would ruin this country.
(And what about the “electioneering” in this column’s title? Power industry sources claimed that many of the generators’ shutdowns in November were due to the fact they could no longer postpone the required maintenance of their plants. Petilla in March and April told them to postpone their maintenance in order not to risk a power shortage that would have either pushed Meralco prices or, worse, caused brownouts. Why was Petilla so concerned at that time? The May midterm elections obviously.)