News & Events

October 7, 2014

THE DAILY TRIBUNE: House eager to hand over special powers to Aquino

Palace allies at the House of Representatives will again prove "what President Aquino wants, President Aquino gets" when they hand over in a silver platter emergency powers to Aquino purpotedly to head off a power supply crisis next year, which is also a pre-election year.

The House committee on energy said it is set to grant Aquino the emergency powers he needs to slave off the power crisis during the dry season next year even as members of the minority said that the sought extra powers are prone to abuse.

The assurance was made yesterday by Oriental Mindoro Rep. Reynaldo Umali, chairman of the energy panel. Umali said that emergency powers are needed to ensyre that there will be no power outages that would affect the economy and the people.

Umali said that Congress would guarantee that the emergency purchase of additional electricity would not be taxing the people especially that the alleged requirement increased from 300 to 1,200 megawatts (MG).

Umali said that the emergency powers for Aquino wil not be a "blanket authority" so that onerous contracts with the Independent Power Producers(IPP's) during the energy crisis in the time of then President Fidel Ramos will not be repeated.

"What we can assure the public is that we will not give the blanket authority like how it's done in the past. Instead we will do our job by making sure that we will unburden the people," said Umali.

Earlier, Energy Sec. Jericho Petilla warned Congress leaders during a briefing that the country could face seven to eight hour daily power outages could hit the country.

Umali said the most important thing is for the government and Congress to ensure that there would be no brownouts next year.

"As I always say, the most expensive power is no power. This will really damage our economy especially now that our economy is going strong, expanding at 7.2% last year. We cannot afford a one-hour brownout or even less than that," he said.

Umali said Petilla claimed that the worst scenario of El Niño phenomenon may require 1,200 MW of additional power while the mild El Niño Phenomenon may need 800 MW.

Umali said HOuse leaders acknowledged that there would be power crisis next year and that Congress will just scruitinize first the volume of electricity shortage that will be needed through House Resolution (HR) No. 1533 filed by Speaker Feliciano "Sonny" Belmonte Jr. and House Majority Leader Neptali "Boyet" Gonzales II.

LPG-MA Rep. Arnel Ty, however, described government's plan to lease and operate diesel-fired modular generator sets (gensets) to cover the Luzon grid's projected 600-megawatt(MW) power supply deficit next summer is prone to corruption.

"Offhand, the plan is vulnerable to corruption, particularly in the selection of the foreign supplier of some P6-billion worth of gensets (generator sets)," Ty said.

"Hundreds of millions 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 Department of Energy (DOE) intends to enter into an emergency lease agreement with a foreign 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 pased on to consumers," Ty said.

The DOE plants to tap the Power Sector Assets and Liabilities Management Corp. (PSALM) to charter and drive 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 intended as compensation for National Power Corp. employees illegally terminated in 2003.

The DOE foresees an emergency on account of the Luzon grid's estimated 600-MW supply shortfall over a period of five months, from February to June 2015.

Upon the recommendation of Energy Secretary Carlos Jericho Petilla, Malacañang has decided to invoke the emergency provisions of the Electric Power Industry Reform Act fo 2001, to enable government to establish the required additional generating capacity under such terms and conditions as Congress may authorize via a joint resolution.

Like Speaker Feliciano "Sonny" Belmonte and Majority Leader Neptali Gonzales, Ty also doubted 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 generator owned by large private enterprises and registered with the Energy Regulatory Commission are capable of producing an aggregate of 1,800 to 2,00 MW of electricity, which is more than sufficient to cover the expected 600-MW supply deficit," Ty said.

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

"In fact, the Manila Electric Co., through the ILP, has already managed to secure the delivery of some 300 MW of additional supply between February to June 2015, thus reducing by 50 percent the originally anticipated 600-MW deficiency," Ty added.

The Philippien Chamber of Commerce and Industry (PCCI) is also pushing for an expanded ILP to fully cover the remaining 300-MW deficit, as the program will cause the least increase in electricity rates during the shortage.

Based on initial calculations, Ty warned that the use of the gensets to be leased and run by the PSALM could lead to an add-on electricity charge that is at least double the surcharge that may be passed on to consumers under ILP.

comments powered by Disqus