Malacañang orders EPIRA review

MALACAÑANG on Tuesday ordered the Department of Energy to review the Electric Power Industry Reform Act of 2001 (EPIRA) in a bid to curb the looming power crisis in the country.

“President [Gloria] Arroyo during the Cabinet meeting ordered the Energy department to review the EPIRA law, particularly Section 71 to ensure  reliable and secure electricity,” acting Socioeconomic Planning Secretary Augusto Santos told reporters.

Section 71 of the EPIRA states that the executive branch must seek Congress’ authorization for additional generation capacity when there is an imminent shortage of electricity.

The move of Malacañang came on the heels of a report made by the National Economic Development Authority that the country will need an additional generation capacity of 16,550 megawatts; between 2010 and 2030.

During the period, Santos said Luzon will need 11,900 megawatts; Visayas, 2,150 megwatts and Mindanao, 2,500 megawatts.

Data from the National Grid Corporation of the Philippines showed that the available capacity for Luzon as of March 23 is about 7,184 megawatts compared to the peak load of 6,941 megawatts. In the Visayas, the available capacity is 1,249 megawatts compared to the peak load of 1,219 megawatts.

In Mindanao, the available power generation capacity is only 822 megawatts compared to the peak load of 1,244 megawatts.

A report by New York-based think tank Global Source said the EPIRA bars government, except with Congress’s approval, from doing what the Ramos administration did in 1992 to 1993 to solve the power crisis then, such as entering into energy purchase contracts with independent power producers.

Global Source that based on the $1 million per megawatt rule of thumb for costing power plants, every foregone 1 percent of gross domestic product (GDP) growth translates into over P70 billion of losses for the economy, which is enough to pay for a 1500-megawatt power plant.

GDP is the total value of goods and services produced in a country in a year.

Global Source said that the power crisis could derail the country’s economic growth.

The government expects GDP to grow between 2.6 percent and 3.6 percent this year.

Moreover, the report said that the government’s declaration of a state of calamity in Mindanao, which gives local governments the go-signal to release funds to address the problem, will help avert a zero or even negative growth scenario in Mindanao. –DARWIN G. AMOJELAR Senior Reporter, Manila Times