Risa's warning: Public utilities can fail even with foreign involvement

Reiterating her stance against Charter change (Cha-cha), Senator Risa Hontiveros said on Friday, Feb. 16 that the consumers' experience of power instabilities under public utilities despite foreign involvement was a clear indication of "failure".

She says that this is contrary to the claims that permitting foreign ownership through Cha-cha would be beneficial for both the economy and public services.

“Kahit na may dayuhang nagmamay-ari sa ating transmission grid, taun-taon na lang, kada papasok ang summer months, nakararanas pa rin tayo ng rotating blackouts sa Luzon at Visayas sa kabila ng mas mataas na presyo ng kuryente sa panahong ito (Even though foreigners own our transmission grid, yearly, as summer comes in, we still experience rotating blackouts in Luzon and Visayas despite the high power costs these days),” she said. 

"I've been consistently pointing out the connection between power industry problems and the proposed economic Charter change in the Senate. Our ongoing power challenges clearly show how the industry, despite allowing significant foreign involvement for the past twenty years, has failed to meet expectations,” Hontiveros added.

Her remarks came during the recent Senate deliberations on Resolution of Both Houses (RBH) No. 6, wherein she underscored the chronic challenges faced by the power sector despite decades of foreign participation.

She cited the Department of Energy's (DOE) recent warning about the tight power supply in the upcoming El Niño-affected summer months.

Hontiveros, during the Senate hearing on RBH No.6, quizzed the National Economic and Development Authority (NEDA) and the Board of Investments (BOI) regarding the efficacy of opening up the power generation sector to foreign ownership.

"It's crucial to question our economic agencies because we're examining if an economic charter change is still needed, given significant foreign investment. For example, renewable energy investment alone reportedly totals $13.76 billion," Hontiveros stressed.

Previous Senate inquiries led by Hontiveros identified various factors that contributed to challenges in the power industry. These includes corporate cross-ownership, regulatory capture, grid mismanagement, and prioritization of business interests over public service delivery.

According to the senator, what should be focused on is the concentration of ownership, especially in the power sector, where it is increasingly evident. According to 2020 data, 11 families control 43 percent of generation capacity, 40 percent of captive connections, and 68 percent of utility sales.

“We need to pause and reconsider. The heavy ownership control by the same families in generation, transmission, and distribution likely stifles investment in power generation. Despite opening to foreigners over two decades ago, removing barriers hasn't spurred new supplies, as these family incumbents preempt access to consumers,” she said.

Hontiveros emphasized the importance of allowing ordinary consumers to own generation and distribution assets in the power sector, and aligning with the national economic goal outlined in Article XII of the Constitution.