House leader bats for full implementation of Epira to solve power problem

Saying that emergency powers are not needed, Deputy House Speaker and Camarines Sur Rep. Arnulfo Fuentebella said yesterday the creeping power outages threatening the country, especially Mindanao, could have been avoided had the Electric Power Industry Reform Act (Epira) of 2001 been faithfully implemented.

Fuentebella, who is co-chairman of the joint congressional power committee, said that as early as 2007, he had made several presentations on the possibility of power outages by 2010.

“I made this conclusion following an analysis of the power supply demand and dependable capacities at that point in time and projected growth demand,” he said in his letter to Speaker Prospero Nograles last March 4.

Fuentebellla’s concern was based on the “delays in the implementation of Epira,” which he co-authored in 2001.

The delays, he said, stemmed from the “non-performance” of the executive agencies tasked to implement the Epira.

To start with, Fuentebella said, the first set of officials of the Energy Regulatory Commission (ERC) “made several erroneous decisions that affected the distribution utilities’ financial viability. These include the imposition of the generation rate automatic mechanism (GRAM) and incremental currency exchange rate adjustment (ICERA), which disallowed the recovery of full generation costs.”

“This uncertain regulatory environment discouraged potential investors from coming in,” he lamented.

As a result, Fuentebella said, privatization was delayed, when it should have been completed (at least 70 percent) by 2004.

It was only in 2006 and until Jose Ibazeta’s appointment in Power Sector Assets and Liabilities Management Corp. (Psalm) that privatization gained momentum, he said.

“We are close to 70 percent once the Ilijian IPPA contract is privatized. Still, that’s almost nine years in the making. We wasted several years (the overcapacity years) before we were able to privatize,” he pointed out.

In addition, Fuentebella said, a lot of technicalities such as paperworks were encountered along the way “that discouraged new entrants. Whether these were intentional or not is another story.”

The Department of Energy (DoE), the Camarines Sur solon stressed, is mandated to come up with a power development plan to be updated annually.

“It is questionable why the crisis happened without warning,” he noted.

Furthermore, the water elevation of the Lake Lanao, among others, was not disclosed appropriately to those concerned until the crisis happened. “Is this premeditated?” he asked.

In his letter to the Speaker, Fuentebella stressed there’s no need for emergency powers as “no additional capacities are needed to solve the problem.”

“What Mindanao needs is a replacement of the capacities that were lost due to the drought, Mindanao being predominantly dependent on hydro for its power,” he noted.

Section 71 of Epira states that “upon determination by the President of the Philippines of an imminent shortage of the supply of electricity, Congress may authorize, through a Joint Resolution, the establishment of additional generating capacity under such terms and conditions as it may approve.”

“In addition, emergency powers will not automatically bring in the necessary capacities as it will also take time. Modular Gensets are not practical as it need a lot of space and has fuel capacity logistics problems,” said Fuentebella.

One solution, the lawmaker said, is through “demand management and the implementation of the interruptible load program (ILP) as done in the Visayas. Mindanao’s problem is mostly on peak. The ILP will shave the peak demand.”

Fuentebella said another solution is to get the inventory of available barges and bring it to Mindanao.

However, this is a costly alternative, he added. PNA