News & Events

October 7, 2014

PEOPLE'S JOURNAL: Solon fears graft in special powers plan

An opposition lawmakers smells "corruption" in the Department of Energy (DoE) proposal to lease generator sets as an option to avert the looming energy crisis in 2015.

In a statement, LPGMA party-list Rep. Arnel Ty said that the plan to lease and operate diesel-fired modular generator sets is prone to political corruption.

Energy Secretary Jericho Petilla is insisting on the lease of additional power generators amounting to P6 billion to cover the Luzon grid's projected 300 megawatt power supply deficit this coming summer.

The looming power crisis is the reason why President Benigno Aquino asked Congress to pass a joint resolution authorizing him to establish additional generating capacity.

According to Ty, the plan is vulnerable to corruption, particularly in the selection of the foreign supplier of some P6 billion worth of gensets.

"Hundreds of millins of pesos, possibly billions worth of fuel supply contracts will also be up for grabs." Ty said.

"We presume the gensets and the fuel supplies will be acquired under emergency conditions. Thus, all existing policies and rules meant to ensure the integrity and fairness of the procurement process may be put aside," he warned.

Once Congress authorizes Malacañang to install the additional generating capacity supposedly needed to address the power shortage, Ty revealed that the DoE intends to enter into and emergency lease agreement with a foreighn supplier for the delivery of the gensets.

"The P6 billion for the lease of the gensets does not include fuel costs and other expenses needed to run the gensets. And all these costs are bound to be passes on to consumers," Ty said.

The DoE plans to tap the Power Sector Assets and Liabilities Management Corp. (PSALM) to charter and run the gensets.

But Ty doubts the PSALM's capability to carry out the plan, considering that the state-run entity is facing garnishment of some P62 billion in assets inteded as compensation for National Power Corp. employees illegally terminated in 2003.

Like Speaker Feliciano Belmonte Jr. and Majority Leader Neptali Gonzales II, Ty also doubts the need for emergency powers to contract the extra generating capacity, as he noted the availability of vast supply reserves through the Interruptible Load Program (ILP).

"The standby generators owned by large private enterprises and registered with the Energy Regulatory Commission are capable of producing an aggregate of 1,800 to 2,000 MW of electricity, which is more that sufficient to cover the expected 600-MW supply deficit," Ty said.

"Even without emergency powers, government is in a position to harness and deploy these privately held standby generators via the ILP, while providing fair compensation to their owners," he added.

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