TRANSCRIPT OF AMBUSH INTERVIEW OF SEN. SERGE OSMEÑA AFTER THE HEARING OF THE JOINT CONGRESSIONAL POWER COMMISSION

Q: You seemed apprehensive about passing on to the people the additional cost for FIT?

Serge: Itong batas na ito ay naipasa nung wala ako sa Senado. I think we would have been able to temper it but that's water under the bridge now. Itong FIT naman, half of the countries that are promoting renewables use the FIT formula. Ngunit merong mga teknolohiya na masyadong mataas ang presyo, like P18/KWH per kilowatt hour. If you take into consideration our generation cost, the average cost today is P4.50/kwh, pinababayad natin ang taumbayan ng P18/KWH , ang sabi ko, mabibitay ako dito kapag nalaman ng taumbayan iyan. So nire-resist ko iyong mga high-cost technology muna.

For example, solar. You know that the price of solar panels are coming down by maybe 50% within the next 5 years. So instead of paying P18/KWH /kwh now, maghintay na lang tayo ng 5 years, then maybe we'll pay only P9/kwh for a start. If we contract them today, under the law, that's P18/KWH we pay for 20 years. Sabi ko, sobra naman iyon. If we contract them 5 years from now, they'll pay P9. Even for 20 years, that's better than paying P18/KWH for 20 years. So, that is a policy decision that the JCPC has to make. It's very hard in our own conscience to allow P18/KWH /kwh to be passed on to the consumers for 20 years.

Q: So you're saying that the prudent thing is to wait?

Serge: Yes, 5 years. Because solar is coming down very fast. There's a glut now in the manufacturing in Europe, although that's being absorbed by Japan because they have closed down their nuclear plants. So, may temporary stop gap measure sila. But all of the projections, everybody I have talked to, whether it's the Asian Development Bank or the World Bank people, they all say it's coming down by 50% in the next 5 years.

Q: Pero ngayon pa lang nagrereklamo na sila (solar energy investors) na masyado ng mababa?

Serge: Yes, because it's very expensive. So, the NREB (National Renewable Energy Board) gave it an allocation of 100 MW to solar. Pero sobra iyon, ang laki-laki nun. Ang sabi ko, that's too much, out of 760MW, and 100MW will go to solar. I said, no. Bring it down. Because it's very hard to ask our people pay for that. Okay, let them pay 50MW instead of 100MW. But I still think it's too high, I want to bring it further down to 20MW. Talagang bababa iyan eh.

Q: Talagang magagalit iyong mga companies...

Serge: Yeah. But 20MW is more absorbable. 20MW in 760MW is a very small number but 100MW into 760MW, wow. Siguro ho makikinig naman ang ERC. Kahit tanungin mo ang taumbayan, 'Gusto mo bang magbayad ng P18/KWH ?' I am sure you don't want a 'Yes' answer.

Q: Don't you think this will turn off potential investors in the solar energy sector?

Serge: No, walang kuwenta iyan. Alam mo, itong solar, binibili natin iyan sa China, they are the cheapest producer of solar panels. So don't tell me it would lower the cost of our production. Because it will not. We're hardly producing solar panels here. Even the US and Europe buy from China. You know China naman is low-cost producer. So, why will I make the Chinese richer at the expense of our people? I will let the Americans and the Europeans pay for it first, then the Germans and the Spanish pay for it because they can afford naman eh. As a matter of fact, sa Thailand nasa P14/kwh lang ang FIT rate nila eh.

Q: Paano nila naibaba iyon?

Serge: They have more flat lands. They have lower cost of money. They explained it kanina. And they have better credit to the rest of the world than we do.

Q: You think we can afford to wait for 5 years?

Serge: The decision tree goes like this: Do I sign a 20 year contract now for P18/KWH /kwh or do I wait for 5 years and sign it at P9/kwh? You choose.

Q: Do we have other alternatives?

Serge: Yes, we have. We have other alternatives naman. We have water, which is only P6/kwh; biomass like rice hull; biogas and that's only P7/kwh; wind is P10/kwh; then solar is P18/KWH ... that's P18/KWH ! That's why solar is controversial to me, to us because it is P18/KWH . Meron pang P6, P7 and P10, tapos magbabayad ka ng P18/KWH ?...

Q: Pero may immediate concern na ni-raise si Cong. Rufus about Mindanao?

Serge: That does not solve the problem. You know why? Because solar only has a capacity use, capacity factor they call it, of 16%. Una sa lahat, half the day walang sun, and then may clouds pa, etc. Officially, they said so, they only have a capacity factor of 16% when compared to coal. So if you put up a 100MW solar plant, it's really like putting up a 16MW power plant kung coal ang sinet-up. And you know, it (solar) costs about $2.5M to $3M per megawatt. So, if you put up a 100MW solar plant, it would cost you about $300M. Compared to coal, if you put up a 16MW coal plant, it will only cost $25M. And I'd rather have the coal plant because it runs the whole day, sa gabi meron pa rin akong power.

Q: Pero may environment issues sa coal, di ba?

Serge: Yes, but we're using clean coal now. We are only allowing now Clean Coal Technology, like the one in the United States. The US gets 30% of its power from coal but clean coal, you know, they're watching the coal beds, they have inventory, they put scrubbers so iyong emission malinis.

Q: So you're saying the DOE is on the right track? Kasi sila naman ang nagbaba nung FIT?

Serge: Yes, but I would rather that they lower it some more, the allocation for solar. Lower to 20MW because it (100MW) is really hard to justify. If you see it in your bill.... let me cite an example. Halimbawa, P.11/kwh (11 centavos) ang idadagdag for the FIT-ALL (FIT-Allowance). Tapos meron isang maliit na bahay diyan sa Tondo, and they use about 100/kwh a month, this will add P11 to your bill. Now, PSALM has said that they need to collect already the Universal Charge, and that translates to .39/kwh (39 centavos), that's another P39 addition to your bill. If you only have a small house, with only 2 light bulbs, and one TV set, you're already looking at P11 plus P39, which is P50 addition to your bill. Hindi ka ba aangal niyan?

Q: You did not mention yet Meralco, may additionals din sila?

Serge: Yes. So you know, we have to try to mitigate all of these increases. Within reason naman. Kasi para kang may credit card, charge ka ng charge.