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Furor over Apo 2 (Or why the second geothermal power plant on Mt. Apo should not operate)
Source: Inquirer
Author: Bobby Timonera
Date: 1999-06-12
 
WHILE the mere mention of the name

of the majestic Mt. Apo appeals to

many, this is not so in the case of

workers of the National Power Corp.,

particularly those in Mindanao.



They are not to blame. For the workers' unions, Apo has

become synonymous with government losing and wasting

hundreds of millions, if not billions, of pesos annually.



Union officials say this is not the doing of the gods in the

country's highest mountain but of big business and government

technocrats behind the construction of two geothermal power

plants on Apo.



Both are being run by the Philippine National Oil Co.'s Energy

Development Corp., one of the independent power producers

(IPPs) generating electricity and selling their produce to

Napocor.



The first geothermal plant started operations in 1997 with a

capacity of 47 megawatts. The second, which can generate 48.5

mw, has just been completed and is set to go into commercial

operation on June 17.



But the Napocor Employees Consolidated Union (Necu) and the

Napocor Employees and Workers in Iligan City, where the

state-run power company's Mindanao Regional Center is based,

are doing everything they can to stop the plant's operations and

its joining Napocor's Mindanao grid.



Protest rally



They are staging a rally today to dramatize their protest, and

they are getting the people's support. Their previous rallies were

well-attended.



The Iligan city council has passed a resolution urging President

Estrada and Congress ''to desist the activation and to review the

onerous contract'' of Apo 2.



Congress, too, has been receptive to the unions' plea. Last

month, Lanao del Sur Rep. Mamintal Adiong called for an

investigation on the ''merits and demerits of the scheduled

operation'' of the plant.



Why the protests?



According to the unions' computations, starting June 17,

Napocor will be paying the PNOC-EDC almost P70 million a

month for Apo 2 alone.



Jovencio Palisbo, Necu regional president for the support and

engineering group, said the amount would go to waste because

Napocor did not need the extra electricity.



In fact, he said, Napocor's Mindanao grid, which generates

power mainly from six hydroelectric plants along the Agus River

in Lanao, has an excess capacity of 150 mw.



Obliged to buy



According to a union official familiar with the contract between

Napocor and the PNOC-EDC, Apo 2 has a ''minimum energy

off-take'' of 398 gigawatt-hour annually or about 95 percent of

its generating capacity. Meaning, Napocor is obliged to buy

that much amount of electricity from the geothermal plant.



If it does not, Napocor will still pay the cost of generating the

398 gwh, which is close to P70 million a month at over P2 per

kilowatt-hour.



Union officials say this contract is ''onerous'' and demanded that

top management review its provisions.



It is not only the Apo plants that bear similar contracts, but

practically all of the IPPs in Mindanao and, probably, elsewhere,

union officials said.



In other IPPs that use fuel (like diesel and coal) to generate

electricity, there are ''capacity fees'' and ''fixed operating and

maintenance expenses'' that Napocor pays annually, whether or

not the IPPs generate power. If they produce power, Napocor

will have to pay for the fuel cost.



Union officials say Napocor must be paying about P3 billion

annually to about 10 IPPs in Mindanao. In contrast, Napocor

spends only about P900 million a year to operate and maintain

nine ''very efficient'' hydro plants in Lanao, Bukidnon and

Davao.



Why the contracts?



But why this kind of contracts?



Palisbo said that during the power crisis six years ago when

there were brownouts all over the country, the Ramos

administration encouraged the private sector to put up IPPs to

stabilize the situation. But when things did stabilize starting

1994, the government apparently failed to monitor the situation

as more and more IPPs were built, the union official said.



Most of the top officials in Napocor were out of town for

business or out on ''Centennial leave'' when the Inquirer sought

them for an interview this week.



A Napocor report said that of the 45 IPPs all over the country,

31 are losing and only 14 are earning.



Earlier, Napocor vice president Cerael Donggay, who heads a

committee reviewing contracts with the IPPs, told the Inquirer

that losses in these plants reached P4.5 billion in the first half of

1998 alone.



The IPPs sell electricity to Napocor at over P2 per kwh.

Napocor, in turn, sells power to consumers at only P1.32 per

kwh, and shoulders the difference.
 

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