Mindanao Modular Generator Sets (Gensets) Program

The Mindanao Modular Gensets Program was an emergency short-term power supply measure to address the deteriorating power situation in Mindanao during the Aquino III administration, pending the construction of new baseload power plants scheduled to come online by 2015.

Legal basis: EO 137 (s. 2013), signed July 12, 2013, by President Aquino III.

Lead agency: Department of Energy (DOE), implemented through the National Electrification Administration (NEA).

Context

The Mindanao Power Monitoring Committee (MPMC) — created under EO 81 (s. 2012, see Digest: EO 81 (s. 2012) — Creating the Mindanao Power Monitoring Committee (MPMC) ) — concluded that the existing Interruptible Load Program (ILP) and Interim Mindanao Electricity Market (IMEM) Program were insufficient to address Mindanao’s power supply deficit. MPMC recommended modular gensets as an immediate solution [EO 137, s. 2013, WHEREAS ¶1–2, 2013-07-12].

Mindanao’s power crisis during this period was characterized by 8–12 hour rotating brownouts, significantly disrupting industry, agriculture, and households in the island group.

Program Mechanics

• Loan facility: NEA extends loans to participating electric cooperatives (ECs) for acquisition of modular gensets
• Implementation: NEA, in consultation with MinDA and AMRECO, implements the program
• Monthly reporting: NEA through DOE submits monthly progress and disbursement reports to the Office of the President, copy to MinDA [EO 137, s. 2013, §§1–4, 2013-07-12]

Funding

₱4,500,000,000 (₱4.5 billion) released by DBM from the Malampaya Fund (SAGF-151 / DOE Fund 151) — the Special Account in the General Fund derived from the government’s share of Malampaya gas revenues under SC 38 [EO 137, s. 2013, §2, 2013-07-12].

The release was subject to Bureau of Treasury (BTr) certification of SAGF-151 fund availability and standard government accounting and auditing rules.

Controversy

The use of ₱4.5 billion from the Malampaya Fund for the gensets program became one of several large disbursements from Fund 151 during the Aquino III period that were later subjected to scrutiny by the Commission on Audit (COA) and the Senate, as part of broader concerns about Malampaya Fund oversight and governance. The Malampaya Fund authorization (PD 910 + EO 848/2009) allowed presidential direction of Fund 151 disbursements for “energy resource development and exploration programs” — the gensets program’s fit under this mandate was contested.

Status

The program was a short-term bridge measure. As new Mindanao baseload capacity came online (2015-2016), the acute power supply deficit eased and the emergency gensets deployment was no longer the principal supply mechanism. See Malampaya Gas Field for the full Malampaya Fund context.