News & Events

October 7, 2014

THE MANILA STANDARD TODAY: ‘Power crisis plan corruptible’

A ranking member of the House Minority Bloc on Monday cautioned the government on plans to lease and operate diesel-fired generator sets (gensets) to cover the Luzon grid's projected 600-megawatt (MW) supply deficit next summer.

"Offhand, the plan is vulnerable to corruption, particularly in the selection of the foreign supplier of some P6-billion worth of gensets," said House Deputy Minority Leader and LPG-MA Rep. Arnel Ty said in a statement.

He said leasing gensets to be run by the Power Secor Assets and Liabilities Management Corp. (PSALM) could double the surcharge passed on to consumers under the Interruptible Load Program (ILP).

"Congress must now judiciously consider the appeal for emergency powers, and ascertain the best possible cure for the menacing power shortage," Ty said, noting "hundreds of millions of pesos, possibly billions, worth of fuel supply contracts will also be up for grabs" as a result.

"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 out aside."

According to Ty, the Energy department wants to sign an emergency lease agreement with a foreign supplier of gensets once Congress authorizes Malacañang to authorize the contingency generating capacity.

"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 passed on to consumers," he said.

But Ty doubts the PSALM's capability to carry out the plan because it is saddled with the garnishment of some P62 billion assets to pay National Power Corp. employees illegally terminated in 2003.

Upon the recommendation of Energy Secretary Carlos Jericko Petilla, Malacañang has decided to invoke the emergency provisions of the Electric Power Industry Reform Act of 2001, to ensure additional generating capacity uder such terms and conditions as Congress may authorize via joint resolution.

House leaders led by Speaker Feliciano Belmonte Jr. and Majority Leader Neptali Gonzales II were unconvinced amid vast supply reserves.

"The standby generation 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 than sufficient to cover the expected 600-MW supply deficit," Ty said.

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