Philippines - Electrcity - " Punishment of the ERC, PSALM and FDC Misamis for the Apo IPPA Scam" By David A. Tauli, Mindanao Coalition of Power Consumers

 " The Independent Power Producer Administration for the Mt. Apo geothermal power plant was illegally privatized by the Power Sector Assets and Liabilities Management Corporation in 2014. The IPPA contract was awarded to the FDC Misamis Power Corporation after a fraudulent IPPA privatization process. In the process of privatization, the PSALM violated the EPIRA rules which require that privatization of generation assets of the National Power Corporation should be done without changing the rates of the power plant being privatized and without changing the existing power supply contracts for the generation of the power plant. The PSALM cancelled the existing power supply contracts of PSALM customers for the generation of Mt. Apo, and then entered into new contracts with 15 electric cooperatives, with the price of Mt. Apo increased from the duly-approved rate of 3.00 pesos per kWh to 5.40 pesos per kWh.

The commissioners of the Energy Regulatory Commission got involved in the Apo IPPA scam through their illegal approval of the rate of 5.18 pesos per kWh to be passed on to member-consumers of the fifteen electric cooperatives whose officers were victimized by (or conspired with) the PSALM Corp and FDC Misamis into defrauding their own member-consumers.

A class suit will be filed against the officers of the PSALM Corp for this illegal act that has inflicted grievous harm to power consumers in Mindanao. This will be done simultaneously with the filing of a class suit against the ERC commissioners for illegal approval of the increase in the rate of the Mt. Apo geothermal power plant.

Punishment of the ERC commissioners and PSALM officers will come when they will be found guilty of criminal acts in the Mt. Apo IPPA scam. The criminal cases are likely to go to the Supreme Court, so it will be a long time before power consumers in Mindanao can be given justice. But other forms of punishment are now being inflicted on the miscreants in the Apo IPPA scam.

The power supply contracts for the generation of the Mt. Apo geothermal power plant that were entered into by the electric cooperatives with the FDC Misamis Power Corp were for a period of one or two years. All the contracts have now expired and need to be renewed in order for the FDC Misamis to continue to be paid the money that is being extorted from power consumers. But the officers of the electric cooperatives who were victimized by the PSALM Corp in this scam will not renew the power supply contracts for the generation of Mt. Apo. The reason for not renewing the contracts is that baseload generation is now available in Mindanao from the new coal power plants at prices lower than the 5.18 pesos that is being charged for the generation of Mt. Apo.

If the price for renewing the power supply contracts for Mt. Apo is reduced to the rate of 3.00 pesos per kWh that was duly approved by the ERC, then the electric cooperatives will be happy to renew the contracts. But the PSALM Corp and FDC Misamis cannot reduce the price from 5.18 to 3.00 pesos per kWh because that would be admitting that the rate of 5.18 pesos per kWh was illegal.

To solve the problem, the FDC Misamis Corp has persuaded (or fooled) ERC Chairman Jose Vicente B. Salazar into approving that the rate of 5.18 pesos per kWh will continue to be collected from consumers for the generation of the Mt. Apo geothermal power even though the electric cooperatives have not agreed to the renewal of the power supply contracts. In January 2017, Chairman Salazar issued orders authorizing the electric cooperatives to continue to draw power from the Mt. Apo geothermal power plant and pay FDC Misamis the price of 5.18 pesos per kWh.

Of course the electric cooperatives will not pay for any power delivery from the Mt. Apo geothermal power plant since they did not agree to the extension of the power supply contracts. So we have a happy situation in Mindanao where power consumers are now getting free electricity from the Mt. Apo geothermal power plant, and the only recourse of the PSALM Corp and the FDC Misamis will be to stop the geothermal power plant from generating electricity. It will be difficult to do that, and even if it can be done, the PSALM Corp will have to continue to pay the Energy Development Corporation, the owners of the geothermal power plants, for the generation of the geothermal power plant. The PSALM Corp has a take-or-pay contract with EDC for the generation of Mt. Apo, and will have to pay even if consumers do not pay anything for the electricity delivered by the Mt. Apo geothermal power plant. There are eight years remaining in the take-or-pay contract.

The FDC Misamis, the PSALM and the ERC commissioners are now trying to move legal mountains in order to force power consumers to continue to pay 5.18 pesos per kWh, or even 3.00 per kWh, for the generation of Mt. Apo. But there is no way to do that legally.

Power consumers in Mindanao can now witness the sufferings of the ERC, the PSALM Corp and FDC Misamis Power Corp as somewhat of a payback for the two years of extortion through the Apo IPPA Scam that has been inflicted on the consumers. And eventually, even if it takes many years to do so, the billions of pesos already extorted from consumers in the scam will be refunded when the officers of electric cooperatives involved in the scam will be found guilty of having entered into illegal power supply contracts for the generation of the Mt. Apo geothermal power plant. " 

March 13, 2017

(Article supplied by Annie Geron PSI Asia Pacific Region Co - Chair, and a Philippine Union Activists Official)