By Mai Gevera

Davao City (24 November) -- "The cheap power in Mindanao is now going against us," said Mindanao Business Council (MinBC) chairperson Vicente Lao when asked what could have caused the ongoing power crisis in Mindanao.

Compared to power rates in Luzon, Mindanao power consumers have been paying less than those in other parts of the country. This may sound favorable at some point, however, the MBC official fears that this situation could actually bring a worse scenario in Mindanao.

"We need to encourage more investors to come to Mindanao. However, we had difficulty in doing so because they are apprehensive with the cheap power rates that we follow," Lao said.

Bobby Orig of the Davao Light and Power Company Inc. bared that there is no new power plant set to be built from this year until 2014. This only showed disinterest on the part of investors in engaging business in this part of the country.

He explained that Mindanao power situation is not just a looming crisis, but is actually an existing one with a projected power shortage equivalent to the demand of five cities namely Davao City, Cagayan de Oro, General Santos, Zamboanga, and Butuan.

"The power shortage is now being felt with a series of brownouts lately. This will peak by 2014 as we need about 484 megawatts of power," he said.

An investor would need at least $4 million per megawatt to reach the given power demand.

This pushed the MinBC to initiate the bridging of the gap between the government side and the potential investors.

In the coming Mindanao Power Summit, issues concerning governance will be discussed. Lao admitted that there are rules and regulations set by the government which turned out to be very discouraging to investors.

"Our challenge is how to make an environment attractive to investors. And this is one responsibility of the government to adjust certain rules and regulations unfriendly to the business sector."

Orig, on the other hand, cited one specific example that needs a review on the part of the Energy Regulatory Commission.

"The present electricity rates in Mindanao do not reflect to the true cost of power generation," he said.

The DLPC official then urged the ERC to ensure a mechanism that would adjust rates which are cost-based, market-driven, and free from political considerations.

Lao added that the present power rates are actually based on capital expenditures long time ago. This given scenario has caused apprehensions on the investors' part. This has diverted potential investors in Mindanao transferring their businesses in Luzon, instead.

The official said that one way to address this crisis is to build more power plants by 2010.