Pimentel says coal import could bankroll TU campaign

Senate Minority Leader Aquilino Pimentel Jr expressed fear that the alleged artificial shortage in coal supply could be used in raising funds for administration candidates in the May 14 elections. Pimentel on Tuesday criticized top officials of the National Power Corporation (Napocor) for their alleged failure to stock up enough coal to meet higher fuel demand for power generation during summer months. Hydroelectric plants are expected to shutdown due to low water levels in dams, lakes and rivers during the dry season. Pimentel said this “inexcusable lapse" on the part of Napocor management has fueled suspicion of an artificial shortage of coal in the corporation's inventory to justify the importation of this fuel at atrociously high prices. He said the importation of coals at high prices could benefit some people tasked with fund-raising for the administration’s election campaign. “Napocor is creating an emergency to justify high-priced coal-buying, giving rise to suspicion of fund-raising for election." Pimentel said. “This critical oil supply problem could have been avoided considering that the status of the country’s coal is common knowledge among energy officials." Napocor president Cyril del Callar however denied speculations that the corporation made any emergency purchases of fuel, particularly of coal. “There is no truth to the reports that we experienced a fuel shortage, all of our power plants have enough fuel inventory for power generation. It is also not true that we undertook any emergency fuel purchases," del Callar said. Reports said Napocor has awarded several coal procurement contracts in March and April this year, contrary to its earlier claim that the company had secured stocks last December. Pimentel said the frantic effort to meet the coal requirements of Napocor at this late stage is proving too costly to the power firm because of prevailing higher prices compared to those last year. Napocor reportedly awarded a contract for five shipments of coal at $84 per metric ton in early April to the Australian firm Hunter-Valley Coal Corp. Pty Ltd. at P312.2 million per shipment. The coal supply is intended for the Masinloc plant in Zambales from May 13 to 19. Pimentel noted that at $84 per metric ton of Australian coal, this is much higher than the prevailing market price of $64 per MT. This is also triple the procurement cost for coal at $28 to $30 MT for power utility firms with long-term contracts. According to reports, Napocor also awarded three separate coal procurement contracts for $65 to $68 per metric ton to PT Kaltim, PT Andalan and PT Baramulti. This coal is meant for the power plant in Pagbilao, Quezon. Equally disturbing, Pimentel said, was that Napocor will have to borrow $500 million just to secure its fuel needs and meet other generating expenses this year. He said the consumers and customers of Napocor deserve an explanation from Napocor officials on why they failed to work out long-term coal supply contracts in order to avail of lower prices long before the onset of the summer months to head off a fueled shortage. Pimentel said it is the “height of incompetence and lack of foresight" on the part of the Napocor management not to have anticipated the sharp increase in power demand during the summer months especially in light of the El Niño phenomenon and global warming that have caused the rapid drop in water levels in inland bodies of waters - rendering hydroelectric plants inoperable. “As a consequence of the blunders of Napocor officials, the consumers will suffer a lot not only from higher power rates due to the higher cost of power generation but also from occasional power brownouts due to the precarious state of fuel supply," he said.