Power over electric power

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The House of Representatives leadership signified a few days ago its willingness to give President Aquino emergency power under the Electric Power Industry Reform Act (EPIRA). The EPIRA allows government under section 71 to acquire additional energy capacity and enter into contracts during crisis situations. This will be done through a joint resolution of both the House and the Senate under the law.

Bayan Muna representative NeriColmenares questioned the basis of the Department of Energy (DOE) for saying that there will be a power supply shortage as he pointed out that “there is no hard evidence that there would indeed be a power crisis next year.” He feared that the billions for such emergency procurement for additional power generation would be sourced from the controversial Malampaya funds on top of possible pass-on costs to consumers.

For several months now, Energy Secretary Jericho Petilla has been campaigning for the granting of this emergency power to President Aquino since the DOE predicts around 900 MW shortfall by the summer of 2015. The EPIRA has turned over putting up generation capacity to the private sector when it privatized the energy industry.

Another proposal to augment the power supply situation is to ask commercial establishments to join the Interruptible Load Program (ILP). Under the ILP, commercial establishments can voluntarily opt to use their own generating capacity to reduce or cut off their need for power during the said times. Excess reserves will also be brought back to the grid. Senator Sergio Osmeña III estimates around 815 megawatts of power from this scheme.


Yet Congressman Colmenares has a more serious concern about the emergency powers that is being deliberated by the House: owners of power plants can collude and create a repeat of the December 2013 supply situation that brought us the massive increase in power rates early this year. What will prevent these companies from capitalizing on and profiting from the supply shortage?

The Samahang Pisikang Pilipinas (SPP) will be having its 32nd Physics Congress at the National Institute of Physics in UP Diliman this weekend. The convention will host speakers from different universities on varied topics in physics and will show the strong and active research in the country despite the Third World situation that we are in.

A group of my students will present their work on a study the co-ownership of electric power plants in Luzon. They used complex network tools to analyze the co-ownership data that were obtained from the Department of Energy website. Their results indicate that there are critical common ownership patterns that may affect energy supply and pricing in the country.

We constructed two networks from the given dataset. One network looks at which plants have a company as a common shareholder, which we will call the shareholder network. In the common shareholder network, each company is represented by a node which will then be shown as connected if they have a common shareholder. The other network is the power plant ownership network where the nodes are the plants and a connection exists if the nodes share a common owner.

We found out that in Luzon, the company with the most number of shareholders was found to be GN Power Mariveles Coal Plant Ltd. Co., with an in-degree of 4. This means that three companies are in GN Power’s group of owners. This also makes it the company with the highest betweenness centrality that is a measure of its ability to connect the nodes in the network.

For the power plant networks, the Ilijan and Limay plants are the nodes with the most number of shared co-owners. The top seven power plants with the highest degrees in the power plant network or the nodes with the most number of edges connected to them are Ambuklao, Bakun, Binga, Hedcor, Magat, Pagbilao and Tiwi. These plants have the most number of common owners in Luzon.

We also found that there are four major communities or groups that own power plants in Luzon. This small number of communities means that the power situation in Luzon is in the hands of only a few companies. This kind of characterization allows us to document and analyze the co-ownership of power plants in Luzon and determine their connectivity properties.

Due to the EPIRA, we ended up not with many providers of power but with only a few powerful companies that own our electricity plants. Government has become powerless to the point that it is driven to extremes such as requesting for emergency power.

Instead of giving the President emergency powers, what we should do is to remove the limiting factor—the EPIRA, and bring back full government control so that we can plan several years ahead of shortages. We cannot be always held hostage to investors to build our power plants that are just waiting for more profits instead of providing service.

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5 Comments

  1. From what I can understand’ there a monopoly in regard to provision of electricity in this country..

    So the company can dictate its own terms–The power lies with them –In all senses pf the word

    They are the only game in town If you dont want to play .Well hard luck!

    The ordinary person just pays up !

    Even if there are black outs . Or the delivery of services can be disrupted by a strong wind.

    Power to the people!–But in the Philippines. Power is in the hands of a few .

    I remain yours
    faithfully
    David M Meyer

  2. victor m. hernandez on

    I fully agree, bring back to government the power of ownership over elctric power generation, that is( or was) NAPOCOR. The present problem we face is due to th privatization of power generations, after NAPOCOR had built and run all of these. This is utility and public service, and should be be under the control and ownership of profit taking investors.

  3. There is not a power shortage. There is no need for emergency power given to anyone. This is all about the oportunity to accumulate money for the 2016 elections. Of course politics will dictate to the power suppliers to shut down for repairs when the demand becomes higher during the summer. They have to do this to complete the story now being told and to show how much worse it would have been if they had not been given emergency powers. I cannot believe how the public is being fooled.

    • very true indeed! i am currently working in the power industry as an independent consultant, mingled and worked with key players, influencers, business personalities in the power business. i learned quickly that this power business is very lucrative and very easy to manipulate using money as pre-cursor… now you see who among the wealthiest families are in the philippines – just look how SM, Ayalas, Aboitiz, SMC and even big time real estate developers are now scrambling to get into the power business even it is not their core competence. this is one of the reason why the power industry is in such a mess in this country since the power business is now in the hands of incompetent operators who only cares for the profit and shares of stocks.

  4. EPIRA limiting factor is not an excuse for the Aquino government not to plan ahead for the increasing demand for power generation. If they had the public welfare in their mind first, then there is no choice but to assure that additional power generators should had been in place ahead of the period where the increased demand is inevitable. But, perhaps Aquino had another agenda in his mind which is the opportunity for big SOP’s if given emergency powers to directly deal with the private power generator contractors just like what Ramos did and these big bucks could help the Liberal Party presidential candidate come 2016 election. Most likely, if the Liberal Party cannot push for their candidate to win the coming presidential race, Aquino and his top cabinet men will have a hard time fighting for their cases at the Ombudsman and Sandiganbayan courts later.