Transcript of Interview of Sen. Serge Osmena

On Petilla's recommendation to declare a state of national emergency

First, I am glad that he is admitting that there's a national emergency. I have been trying to tell them that since 4 years ago. Let me explain.

Alam niyo 'yang power, malayo pa Makikita mo na (ang problema). Parang tren iyan eh, maski 20 miles away Makikita mo 'yung smokestack, alam mo na darating na 'yung tren. So, you can easily predict the growth of the peak demand for power because it is a very steady percentage, which is related to our gross domestic products. So you can go back, let's say 30 years, makikita mo kung paano nag-go-grow 'yung power dito, it's 4-5% a year, very steady iyan.

Number 2, if he is asking for the declaration of an energy crisis, what are their solutions? What type of emergency powers does he propose the president obtain from Congress? Hindi ko alam eh. Kasi wala namang power plant na pwedeng itayo in less than 3 ½ years, unless magpapasok sila ng generators, power barges. Pero sabihin naman niya sa taumbayan kung magkano ang per kilowatt hour cost niyan, kasi that would cost P9 to P15 per kilowatt hour. Baka sumipa din 'yung bayan.

Anong mangyayari kung nasa state of emergency or kung may power crisis?

Hindi ko po alam. Pinapa-research ko ngayon kung ano ba ng ibig sabihin ng power crisis.

What emergency powers should the president have?

That's exactly what I'm asking. What powers do you want now?

Is there a necessity?

Hindi ko nga alam eh. Ang sabi ko nga, hindi naman kailangan eh. They should keep on developing.

Ngayon, there is one power that I am curious if it would be reasonable and constitutional: the power for the President to declare special zones immediately for the construction of power plants. Now, these power plants will take another 4 years to build. But hindi na made-delay by 2 to 3 to 5 years by writs of kalikasan, by local government permits, by national government permits, pwede namang sabihin ng president: 'Within 3 months, start the power plant.'

That's the type of emergency power that we should look at. As a matter of fact, matagal na silang nagpo-propose... kapag sila, ibig sabihin the Department of Energy, since Secretary Almendras' time, that because of the problem that they had with Quezon province, binigyan pa ng P780M in DAP funds... kapalit 'yan ng taxes na kinokolekta ng probinsiya sa Pagbilao power plant eh. There was something that fell through the cracks. Akala ng Pagbilao proponent, it was tax exempt from realty taxes, 'yung Pagbilao power plant, kasi it was owned by Napocor. Now, we did not fully comprehend that when we passed the EPIRA, na tinanggal namin 'yung T sa BOT, 'yung Transfer, na wala na ngayong napupunta sa Napocor. Ngayon, bigla sinabi ng province of Quezon na, gobyerno ang may-ari niyan eh, bayaran niyo ang taxes, they were trying to collect over a billion pesos in taxes, and kailangan bayaran iyan kasi kung hindi, we will foreclose on it for non-payment of taxes and then we will sell it. So, nag-panic ngayon 'yung proponent ng Pagbilao, tumakbo sa gobyerno at 'yun ang naging compromise that was forged by Malacañang.

Now, they were proposing a law na 'yung mga future power plants will be sited in areas which will be declared as special economic zones, and exempt from real estate taxes and lessening the type of permits required. But until now, I am only hearing about it, matagal ko ng sinabi sa kanila na ipadala nila 'yung bill sa Lower House atsaka sa Senado, and we will certainly and seriously consider it, and if it is meritorious, we will approve it. I still have not seen a shadow of that bill.

Kaninong bill po iyon?

It's always being proposed by the Department of Energy. And I know it has the approval of Malacañang. But I have not seen the bill.

Magandang idea ba 'yun?

Well yes, but if only it will shortcut the approval process. Ang hirap ngayon, siguro 3-5 years before one can get all of the 162 signatures required to start building a power plant. Parang slow poke na sinasabi natin na, 'Halika, pasok kayo, mag-invest kayo, magpatayo kayo ng power plant.' Pagkatapos, pagpasok nila naka-break lahat ang agencies of government. No, that is not what we want.

Sen. Trillanes has filed a bill, Electric Power Crisis Act of 2014 which aims to give the President emergency powers. Nakarating na po ba sa inyo ito?

He filed an earlier bill. Pero hindi naman tinutulak sa House. Unless the House approves, we don't have time to approve bills here without the cooperation of the House. There are only 24 senators, now 21, and 'yung House, 288. So, ang working policy ko dito, papasa ba iyan sa House? Kung hindi papasa sa House, teka muna, magwawaldas lang ako ng time. And we have so many other bills to consider.

Are you in favor of that bill?

I don't remember what's on it. Para sakin, ang importante, what kind of power you want, that's first. And then we will consider it piecemeal, 'yun baka pwede. Emergency power for the president to declare Martial Law, hindi naman pwede iyon, hindi papasa iyon. So, it all depends what kind of power is being asked.

Power to enter negotiated contracts?

No. That's not going to shortcut the process! It will still take 3-4 years. Wala namang bidding iyan eh. I don't know why he should be talking of a negotiated contract because there's no bidding there. Because it is not the government which owns the power plant. They're selling it to the highest bidders, which is Meralco, Visayan Electric, LACT Light and Power, San Fernando City Light and Power. Wala namang role ang government. So, what is there to negotiate?

Underground cable?

Teka muna. I am in favor of safety. But if you mandate something like that and it will cost more, ipapasa lang iyan sa mga consumers. Definitely, mas tataas ang presyo ng kuryente. Pinapasa lang iyan eh.

Magkakaroon ba ng say ang Senate and House dun sa emergency powers, may oversight powers ba kayo?

Depende. Kung ano ang ipapasa. Pero para sakin, knowing what I know about the EPIRA, the only type of power that a president may be given in order to alleviate the shortage of power is to shortcut the permit process. I-shortcut natin iyan. But there is no way that you can shortcut the construction process, that will still take 4 years. But if the president says tomorrow, start building the power plant, it will take at least 4 years to finish that plant. Hindi pa rin iyan makaka-resolve ng shortage natin iyan sa 2015, 2016, 2017 and 2018.

Bakit gusto pa na mag-declare ng national emergency by summer next year?

Hindi ko po alam. But I think he wants to bring in some diesel plants. Ang hirap niyan, ang mahal ng power barges. Atsaka sino naman ang kikita diyan, pagkatapos itatapon lang, ibebenta. We still have 2 power barges that we cannot sell, nandun nakatiwangwang sa Iloilo. Why? Because the government does not maintain it. It's suppose to generate an install capacity of 100MW, but it's only generating 20-30MW. So napaka-mahal ng power na iyan. It's costing P15 to P20/kwh. Kung ganyan po ang gusto nila, mahihirapan sila. I will question them anong historical usage ng mga power barges nila. But you know, we passed the EPIRA so we will not need power barges. Ang mahal ng power barges because that's diesel eh. Diesel is the most expensive fuel you can use for power. 'Yung mga gensets, diesel iyan. Ako, may maliit akong genset sa bahay, diesel iyan, mahal iyan. I would rather connect to Meralco. (Diesel) is costing me 3x to 4x more. Then, you'll gonna give that to the Filipino people?

Ano pong forecast niyo: by summer next year, talagang malaki ang kakulangan ng kuryente natin?

Hindi. It will progressively get worse every summer. Particularly, every summer because it is the time for our highest peak demand, because everybody turns on their aircon. (La Niña) will make it worse, because that means our hydro power will be running dry, our dams...Magat, Pantabangan, San Roque, Angat, Caliraya, Botocan, Kalayaan...

Pwedeng hindi (???) si Secretary Petilla para magpa-deklara ng state of emergency?

I really don't want to guess. Hindi ko pa nababasa 'yung statement niya. But I heard something like, emergency powers to bring in power barges...

If that is the end goal, are you saying that declaring a national emergency to bring in power barges would not really solve the power crisis?

It will solve the power shortage. But it will worsen the pricing.

And you know, what will we do with the power barges after 4 years? It's going to cost us a lot of money kasi ibebenta na naman natin iyan, pagkatapos, sinong bibili niyan? But you know, if that's what the President wants, we will seriously consider it. But at least, that's an admission that what I am saying in the last few years that we will be running into a power shortage, firstly because of the time it takes to obtain the necessary permits; number 2, because of the environmentalists and their writs of kalikasan, talagang humahaba ng humahaba ang lead time... at least now, they are now accepting they just worked themselves into a power crisis.

How long will the power barges solve the power shortage?

Depende iyan, parang Eveready flashlight iyan. Siguro within 1 year, we can have 4-5 power barges here already, 100MW each, but that will not be enough. Our shortage will alleviate... kapag gutom ka, and I give you half a cup of rice, it will help your hunger but it will not fully satisfy you. They cannot order too much. And even if they order, like 500MW, makakatulong po iyan siyempre, anything will help, 1MW will help, 500MW will help, but the prices and the final cost to government because those barges are expensive...

Magkano ang pwedeng itaas na presyo?

Depende, kasi blended rate ang ating power prices eh. So, the ones for dispatch and the baseload plants, like coal, water, geothermal, natural gas. Tapos during the peak time, pumapasok, pumapalo 'yung mga diesel plants, gaya ng Limay, Bawang, Malaya...pero napakamahal nun. Now, it all depends. Kapag lumalaki ang contribution nila, mas lalaki, mas tataas ang power bills natin. Iyan din ang unang unang tinatapon kapag hindi mo na kailangan (ng power barges) kasi they are expensive. It is better to use our hydro power plants for peaking power because it's cheaper.

Kung magpapasok ng power barges with 500MW total capacity, how much would that cost?

There's a certain way of computing. Tingnan natin kung maintindihan ninyo.

May fixed cost at may variable cost. Halimbawa, bibili ako ng power barge worth $200Million. Nakaupo lang ang power barge, hindi gumagana. Teka muna, sasabihin ng may-ari ng power barge...may cost na ako diyan... maintenance, overhead, crew, security, etc... so whether that barge is working or not, there's a cost to me. So I'll charge you P6/kwh for nothing. So, I will just multiply that with the number of hours that I think I should be charging and I'll say, 'Okay, you owe me P30M a month.' Parang ganun 'yun. Bayaran ko iyon, babayaran ninyo iyon, whether or not ginagamit ko iyan o hindi. Now, sasabihin ko gagamitin kita from 11-2pm, everyday, Monday through Friday... but I will charge you for the diesel. Because mababa 'yung kuwan, I will have to pay another P6 for the diesel. So it becomes, P13.

Now, the power barge that we have, matatawa ka... the power barge that we have and which we are trying to sell na, medyo luma na din, dun sa Iloilo, Power Barge 102 and 103, tinanong ko, how much is your cost amount per kilowatt hour about 2 years ago? 'Sir, P20!' Nagulat ako. 'Paano umabot ng P20?!' 'Eh 100MW iyan but we're only producting 30MW kasi hindi inaayos ng government. Eh di ba mahal? Your full-crew compliment is good for 100MW, and you're only producing 30. See? It all depends also on the operational management cost. That's what I say, whether you ask me how much, it all depends on what the government is going to sell, and how long it would be allowed to operate.

May nabanggit kayong P0-15 per kilowatt hour?

Dun iyan sa Mindanao. Meron silang power barge dun. Binili ng Aboitiz 'yung isang power barge ng government. It cost them $40-50M to rehab it. One year to tow lang iyan from Iloilo. If I remember right, it was costing Mindanao P9-15 per kilowatt hour. Kasi may cooperatives dun na ayaw bumili, ayaw mag-contract kasi masyado daw mahal. That brings up the cost per kilowatt hour for the fuel contracted. Kung lahat ng cooperatives sa Mindanao ay contracted, then the cost could only be P9. But because the other cooperatives were afraid na magagalit iyong kanilang customer, na ayaw magbayad ng ganung kataas, kahit 'yung blended rates lang, tumaas ang rate ng Aboitiz, ng TMI, Therma Marine Incorporated. That's the way the economics works.