Serge backs shutdown of Napocor plants

Sen. Serge Osmeña has supported calls from private power utility firms for state-owned National Power Corp. to shut down some of its costly, dirty and rickety plants and let independent power producers run new, clean, cheap, and efficient generating facilities.

Osmeña said most of Napocor’s plants are a throwback to the old days of dirty technology since most of those facilities are coal-fired. Coal is an expensive and highly polluting source of energy.

The country is now importing coal to run old plants since the PNOC Coal Corp. has collapsed. It is now just operating as a trading firm.

"We should fold these old facilities down because they have ceased to be cost-efficient and are even harmful to the environment and the people," he said.

Osmeña echoed the call of a key executive of the Manila Electric Co., the country’s main power retailer.

"In a Senate hearing, we came to know from Napocor that the plan on privatization will possibly take two to three years down the road," Meralco treasurer Rafael Andrada said.

Osmeña said the long-pampered state firm is behaving like the irrational spender.

He likened Napocor to a businessman who needs 10 buses in order to make his operation financially viable. However, the businessman already has five operating but insists on buying all 10 because probably the dealer is offering him deep discounts.

He succumbs and buys 10 brand-new shiny units. His fleet expands beyond his capacity to service commuters, the units become underutilized, his payments to the dealer balloons, eating into his profits. Eventually he loses his shirt and the dealer comes calling to repossess.

In order to cut his losses, he ought to negotiate the terms of the purchase with his dealers by stretching his repayment schedule. Then, he ought to idle some of the costly old-model, efficient smoke-belching units and just keep the newly bought models which are fuel-efficient and clean-burning on the road.

Meanwhile, Andrada said Napocor should shut down temporarily its plants to bring down the oversupply and reduce the purchased power adjustment.

Meralco, which is 16 percent owned by the Lopezes and 24 percent government (the remaining shares are owned by various stockholders, including the public), claimed that it buys power from Napocor at higher price or at P4.20 per kilowatthour.

He said Meralco’s IPPs sell only at P3.80 per kWh (Quezon Power) and P3.40 per kWh (First Gas Power Corp.).