Saturday, March 29, 2008 Scrapping of Kepco-Ceneco deal pushed
BAGONG Alyansang Makabayan-Negros spokesperson Junhill Enriquez on Friday reiterated the group's demand to scrap the alleged onerous Kepco-Ceneco deal and Electric Power Industry Reform Act (Epira).
Enriquez said under the power sales contract, Ceneco would buy 40 megawatt of electricity from the coal-fired power plant owned and managed by Kepco-Salcon in Naga, Cebu.
The power plant would be operational by 2010. The contract reportedly assured Kepco-Salcon of a buyer once the coal-fired power plant is operational with an automatic generation cost of P4.30 per kilowatt-hour.
Enriquez claimed the contract is highly questionable and is grossly disadvantageous to the electric consumers of Bacolod and the Ceneco franchise area.
He said the contract will bind Ceneco to the more expensive electricity from the yet to be constructed coal-fired plant that would still be operational by 2010.
With the contract, consumers will pay P4.30 per kilowatt-hour, excluding the 12-percent value added tax (VAT) and other imposed charges such as transportation, foreign exchange rates, and operation expenses that would be charged to the generation rates of the power plant.
Transmission cost charges would also be an added burden as the source of electricity will be in Naga, Cebu. Transco will charge higher transmission charges as the distance gets longer, Enriquez said.
Enriquez also said compared to Kepco's rate of P4.30 per kilowatt-hour, the rate of the National Power Corporation (NPC) is P2.91-P3.1 per kilowatt-hour from geothermal and hydroelectric power plants.
"In Negros, we have the Palinpinon I power plant in Valencia, Negros Oriental and soon-to-be operational geothermal plant in Barangay Mailum, Bago City. The NPC rate may still be lowered under the open access arrangement. But under the contract, Kepco's electricity cost is pegged at P4.30, regardless of the fluctuation of the electricity price in the market."
The deal stipulates that 85 percent of the monthly supply of Ceneco shall be sourced from Kepco, "effectively binding the former to the supply monopoly of the latter. This means that aside from providing the basis for the construction of Kepco's coal-fired plant, it also guarantees assured huge profit for Kepco," Enriquez said.
He said that amid the serious problem on global warming, Kepco's coal-fired plant will add tremendously to the "greenhouse gases" in the atmosphere, thus aggravating the environmental crisis.
As early as September 23, 2005, the Environmental Management Bureau of the Department of Environment and Natural Resources (EMB-DENR) already rejected the environmental impact statement (EIS) submitted by Kepco for its proposed 200-megawatt coal-fired power plant, Enriquez clarified.
Among the complaints was that Kepco has not studied the mercury levels in the blood of Naga residents, who have been exposed to an existing coal plant for the last 20 years. Coal power plants have the reputation of being the dirtiest source of energy, emitting particulates, greenhouse gases, and ash containing mercury, arsenic, chromium and lead.
Enriquez further scored President Gloria Macapagal-Arroyo to be the one responsible for the passage of the Epira, which he said is the reason behind the high cost of power. "And now her son, Representative Mickey Arroyo, wants to fast track the Epira and make the situation of the Filipino people even worse."
The Epira legitimizes the imposition of power purchase adjustments (PPA), deregulation of electric rates pricing, sell-out of generating power plants including the renewable energy and the imminent privatization of distribution utilities, he added. (Karl G. Ombion)
