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DOE owes Albay P102B in geothermal power contributed to national development–Salceda

LEGAZPI CITY—Albay Gov. Joey Salceda has declared it is the Department of Energy (DOE) that owes Albay P102 billion, which the latter contributed to the country’s development over 34 years from out of its indigenous geothermal energy.

Salceda’s statement was in reaction to the announcement issued by Energy Secretary Jericho Petilla that Albay’s electricity supply may be cut off for the failure of Albay Electric Cooperative (Aleco) to settle its unpaid obligations of about P3.4 billion.

The governor cautioned Petilla, and those tasked with the responsibility to address the country’s scattered power problems, to be more cautious and circumspect lest they aggravate the troubles instead of solving them.

“Amid all these threats of disconnections, let us not forget that Albay’s Tiwi geothermal wells had been producing electricity for the past 34 years, with an economic contribution valued at P102 billion to national development,” Salceda said.

He added that power sourced from Tiwi, Albay, accounts 11 percent of the power flowing through the entire Luzon grid, providing the base load of “cheap and clean [electricity], and this does not include the Bacon-Manito geothermal fields.”

He expressed concern that Petilla’s comments could cause undue anxiety among his constituents and a backlash to administration development program. Albay has made impressive development strides, particularly in tourism, where it has posted a 24-percent growth in the last four years.

“It is the DOE who owes Albay P102 billion in power debts. The DOE also singlehandedly murdered Albay tourism when it sequestered all hot baths in Tiwi so the National Power Corp. [Napocor] could monopolize geothermal power. Thus, it took away one of the three legs of Albay’s tourist attractions—the others are Mayon and Cagsawa. Assuming a P500-million annual tourism revenue from Tiwi per year, this adds another P17 billion in opportunity losses to the P102-billion contribution for which Albay has instead been made to pay with higher power rates. Ordinary Albayaños ask why they pay so much for electricity when power comes from them. Kayo ang may P102 bilyong utang sa Albay, [It’s you, the DOE, who owes Albay P102 billion]. Regrettably, I trusted you and made no issue about it in the Supreme Court,” he fumed in a radio interview here.

The DOE, Salceda said, has been overzealous in collecting from poor and ailing power cooperatives around the country, like Aleco and Lanao del Sur Electric Cooperative, while providing a cumulative subsidy now amounting to P75 billion to rich corporations in the Philippine Economic Zone Authority.

Salceda said he does not know what Petilla meant by “cutting off Albay’s power supply,” since, presently, the National Electrification Administration (NEA), another government agency, manages Aleco. “Does it mean the DOE will cut off NEA?” he asked.

He said Petilla, who seems to lack background knowledge on the power cooperatives’ problems, announced the so-called Albay power crisis minus a solution, which is a “a no-no in sound public governance that a problem is announced to the public without a prepared solution in mind.”

“Why would you announce a crisis you have not solved, or you still have no prepared solution for it yet? Do you expect the people, who know nothing about the crisis’s roots, to solve it for you?” he asked in Pilipino.

He explained that the reason Aleco was placed under the NEA’s direct management was to institute reforms to the cooperative’s dragging debt problem, and that is why the NEA has already taken measures to solve it.

Salceda stressed that Tiwi alone produces 220 megawatts (MW) of power, but Aleco uses only 70 MW, flowed back from the grid, which it buys at spiked rates from the Wholesale Electricity Stock Market (WESM) and some bilateral arrangement with Aboitiz Power Corp.

Aleco’s total P3.4-billion indebtedness primarily comes from a previous debt transfer made by the Napocor to Power Sector Assets and Liabilities Management Corp., based on dubious computations and without notification to Aleco as debtor. The transferred debt has ballooned to P2 billion.

The P1.4-billion balance is with WESM, largely caused by a price spike from a mere P2 per kilowatthour to a whopping P65 per kwh from February to May 2010.

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