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Increasing opposition to sale of Leyte geothermal complex in the Philippines

Tongonan, Leyte Geothermal power plant, Philippines
Alexander Richter 8 Nov 2012

Several groups have joined forces to oppose the sale of the unified Leyte geothermal plants on Leyte, Philippines. This is based on the fear of increasing electricity prices for the single most important power plant complex in the country.

Several groups are raising their concern over the sale of the Leyte geothermal plant complex in the Philippines. The Unified Leyte Geothermal Power Plant (ULGPP) in Tongonan, Ormoc, Leyte accounts with 1,958 MW of installed capacity for almost 13 percent of the Philippines’ electricity production and is the single biggest source of electricity in the Visayas grid.

“Convened by the Freedom from Debt Coalition (FDC),  Visayas-based consumer groups, non-government organizations, electric cooperatives, labor groups, people’s organizations and local government units called for action against the privatization of the independent power producer administrator (IPPA) of the Unified Leyte Geothermal Power Plant (ULGPP) in Tongonan, Ormoc, Leyte.

FDC warns that privatizing the biggest generation plant in the Visayas grid would result in rising electricity rates not just in the Visayas, but also to the Bicol region in Luzon.

Last Oct. 4, 2012, the state-run Power Sector Assets and Liabilities Management Corporation (PSALM) started bidding out the ULGPP.

It has divided the bid of the facility in two, with 60 percent opened to big energy corporations and the remaining 40 percent offered to various electric cooperatives.

Among the big industry players who expressed interest in the Leyte geothermal facility since the inception of the privatization plan in 2010 are Aboitiz Power Corp., Pacifica Inc. of the Romero Group, and First Gen Corp., the parent firm of Energy Development Corp.

“We should not forget the experience of the people of Negros Occidental when Green Core Geothermal Inc. (GCGI), the power arm of geothermal leader Energy Development Corporation (EDC, entered into a power sale agreement with Central Negros Electric Cooperative (CENECO) in December 2011,” FDC said in a statement.

Instead of providing clean, reliable and affordable electricity,  FDC said several Negrenses were subjected to 100 percent increase in electricity rates.

FDC said it is concerned that the sale of the ULGPP-IPPA contract will only bear the same results.

FDC blames the Energy Power Industry Reform Act of 2001 (Epira) for the privatization of power generation plants of the National Power Corp. (NPC).

The Epira, according to FDC vice president Manjette Lopez, needs to be repealed. She said it does not only  push power prices up in the country — already the most expensive in Asia – but would also create more debt for the country with PSALM absorbing the remaining debts of these NPC power plants.

The Epira created PSALM to manage and implement the privatization of  government assets in the electric power industry.

Lopez  said the ownership and management of the electric power industry in the country should be returned to the government.

“The government is mandated to serve while businessmen are only looking at return on investment,” said FDC  secretary general for Cebu Aaron Pedrosa.

The FDC invited newly installed Energy Secretary Jericho Petilla but he failed to join the Visayas power stakeholders. Prior to his Cabinet position, Petilla was governor of Leyte.

Petilla who was sworn in as energy secretary only last Sunday, supported the opposition of the ULGPP when he was still governor.”

Source: Inquirer