Conflicted

Last Monday, with several power plants going into “forced outage,” red and yellow alerts were raised. These alerts warn consumers of possible brownouts happening as power supply threatened to fall below demand.

Wild rumors quickly spread, mainly about long brownouts happening. The trauma of the late eighties was stoked. We had recurrent images in our minds of energy deprivation that kills economic activity.

It has been over three decades since those days when brownouts occupied a larger portion of the day. Those were dreary days for those of us in the metropolis. It coincided with the complete collapse of our water supply.

During the past three decades, our power situation remains pretty much the same. Electricity, when it is available, is costly. Having no power is costlier. Our limited energy reserves effectively caps the extent our economy could grow.

Our reserves remain thin. Many of our power plants are old, obsolete and unreliable. We have among the most expensive power anywhere on earth.

Our precarious energy situation has taken its toll. Our manufacturing hollowed out. With uncertain and pricey power supply, few large industries could be attracted to invest in our economy. Consequently, our unemployment rate is high and poverty rampant.

Even as we have diversified our energy sources with the entry of renewable power generation, we are still heavily reliant on diesel and coal. The prices of both commodities rose sharply the past few months.

For the reasons mentioned above, businessmen and ordinary consumers are closely observing the decisions made by the new administration, anxious for a plan that will make our energy situation more efficient and more reliable. Not everyone is happy about the new appointments made.

Pete Ilagan, president of the advocacy group National Association of Electricity Consumers (NASECORE), criticized the appointments of Energy Secretary Raphael Lotilla and ERC Commissioner Mona Lisa Dimalanta. The two appointees, says Ilagan, are closely associated with a conglomerate hugely invested in the power sector. The association could bring about many conflicts of interest.

Lotilla’s appointment was cleared by the Justice Department because he merely sat as independent director for the power business of the Aboitiz Group. Dimalanta’s appointment might appear more problematic.

In April this year, Dimalanta was appointed Compliance Officer of the Aboitiz Power Corp. Before this, she was already lawyering for the Aboitiz group as partner and head of the energy practices group of the Puyat, Jacinto and Santos law firm.

Perhaps, Ilagan’s fears over the conflicted situation of top energy officials is overwrought. It is for these officials to demonstrate they will be fair and even-handed. The energy sector is far too important to be yielded to regulatory capture.

Fall guys

The Senate hearing on the sugar importation fiasco reached a predictable conclusion.

The majority senators recommended four senior DA and SRA officials be charged for the issuance of controversial Sugar Order No. 4 clearing the way for the importation of 300,000 tons of sugar. Among the four is respected Agriculture technocrat Leocadio Sebastian, who signed on behalf of President Marcos who sits concurrently as Agriculture Secretary and SRA chair.

The Senate recommendation glosses over the fact that the sugar shortage is real and recurrent. It likewise glosses over the fact that Sebastian acted well within the scope of powers outlined in the memorandum accompanying his designation as DA undersecretary for operations. That memo did grant Sebastian additional authorities and functions, including the authority to “sign contracts, memoranda of agreement, administrative issuances, instruments and administrative and financial documents necessary to carry out department objectives, functions, plans, programs and projects…”

The resignations of the three SRA official were quickly accepted by the Palace. The fate of Sebastian remains unclear.

The majority senators cleared Executive Secretary Vic Rodriguez, responsible for the memo that gave Sebastian wide powers. Before he finally appeared at the hearing, after the senators issued a subpoena, Rodriguez claimed the President himself ordered his non-participation.

In a rather odd move, Rodriguez even produced a notarized affidavit attesting to the President’s order. By doing that, he was unwittingly dragging the President into the controversy rather than insulating his boss.

At any rate, the Senate recommendations sustained the preferred narrative: that the sugar shortage was artificial, inflicted by hoarders and smugglers. That runs counter to all the facts we now know about the sugar situation: that domestic production is far short of domestic demand.

Minority senators disagree with the majority recommendation, insisting that the DA and SRA officials are merely being used as fall guys to spare higher ranking officials. Succeeding events will probably undermine the narrative the majority recommendations sustain. The sugar shortage is real and whatever disagreements there are cover only timing and volume of importation.

Many analysts fear the recent sugar controversy might be an indication of the new administration’s disposition. When the interests of powerbrokers and the policy decisions of technocrats collide, the administration it seems will sooner abandon the technocrats to accommodate entrenched interests.

The Senate inquiry stayed clear of the basic issue: the fact that government exercised a monopoly over sugar trading, keeping our consumers captive to the high prices that our inefficient domestic producers need to keep their enterprises viable.

There appears to be some motion to introduce a bill at the House abolishing the SRA since this agency protects inefficient producers to the harm of all consumers. Such a bill will surely provoke a much more meaningful debate on our agricultural policies.