Did Petilla just abort economic takeoff?

If you listen to businessmen talking about expected power blackouts next year, you would start blaming Energy Secretary Ikot Petilla for aborting the economic takeoff. For many, Petilla need not emphasize the obvious but just quietly do what he must to alleviate the problem.

I don’t blame the business sector for feeling frustrated. Here we are again, finally attracting serious foreign investor interest, and the energy secretary screams blackout. What sane investor will want to bring some operations here if power availability cannot be assured?

Yet, I can also understand why Petilla had to scream the reality of the problem the way he did. He wants it on record that he issued a warning and offered a solution. He knows, as we should, that nothing gets done in this country unless we are facing a crisis.

In a sense, we can blame government for this looming crisis but the heat of our anger will not produce a kilowatt hour of power supply. We may scoff at Petilla’s band aid solution but it does seem like a feasible if desperate way of having reserve power when we start needing it starting March next year. Now it is too late to do anything much.

Petilla has to understand that people are allergic to granting emergency powers to a President to solve a power shortage problem. It happened before and that emergency power was abused to buy more capacity than needed and at take or pay basis. Our electricity rates zoomed because we had to pay for power we did not consume. The rates have not gone down since as we are still paying so called stranded costs.

Since emergency power means the lifting of the usual public bidding procedures, people are doubly wary. We are still rather angry at how public officials stole our money through DAP and PDAF. Officials just can’t be trusted with the people’s money to give them a blank check to buy generators.

Perhaps Petilla can come up with a number of other possible measures to address the projected power supply shortage. Just buying generators without bidding sounds a bit suspicious specially because he is a politician and campaign season is just around the corner.

The other problem with these generators is that these units use diesel or gasoline and the electricity produced is rather expensive. Perhaps the energy department can look into affordable solar home kits if these are now available and tell the public which ones make sense.

Or the energy department can try to convince those establishments with large standby generators to sell to the Grid when called upon. I heard that Ikot offered to pay P1.50 kwh which will not even cover fuel costs.

PhilStar Reader Roland Lorilla in an e-mail to me last week, commented that “with the Department of Energy conceding that there will be an acute power crisis, the time has come to allow net metering for private generators. We must tap the power available from thousands of standby power generators. This is how we can avert the crisis.”

Mr. Lorilla had been writing me about his suggestion to tap private generators through net metering. “The solution to our energy woes is to diversify our energy sources by allowing everyone to participate in energy generation. If somebody can produce (by whatever means) cheaper electricity than from the utility, he must be given the chance to do so. He must be allowed sell his power by allowing him access to the grid.

“The way to do this is to allow grid intertie and net metering. If we do this, we will have everyone thinking and innovating on how to produce electricity cheaply. If we create the right condition for small scale power generation to prosper, it could be the solution to our energy problems. Grid intertie and net metering are key to making it feasible. It won’t work without these.

“We need to have a law enacted to make the above possible. The law must allow net metering, tax exemption (including fuel taxes) and exemption from environmental laws and regulations as compliance with these laws and regulations are a huge hindrance to the feasibility of small scale power projects.”

It just might work with some adjustments. With the cost of solar panels going down significantly in China, private homes and buildings may find it worthwhile to put these panels on their roofs. The electricity they produce for their own use is so much power the Grid need not supply.

Selling to the Grid through net metering may be a bit more complicated for most of our utilities but Meralco is already offering the service. The problem is the high front end cost for setting up the solar panels, estimated at about half a million pesos.

In the end this may be the way for households to provide for their basic electricity needs. Tax breaks may be necessary to import these panels in sufficient scale to make it more affordable.

It should be interesting for the energy department to come up with simple alternative solutions complete with costing instead of just a single solution of buying those 30MW modules.

The more important thing is to address the problem head on. Why aren’t the private sector power companies building more power plants? Unless this question is resolved, this power crisis will be hounding us forever.

The power producers say government has not fully implemented Epira. Why not? Will it make a difference now? Will open access whose implementation had been delayed be the answer we are waiting for? Or should Epira be modified to allow for some government participation in power generation?

It may be true that the energy secretary aborted our take off. But he can say it will be aborted anyway once the power supply shortage becomes apparent. He can say he has warned us and offered a solution except that his warning is too late to do much and the solution he offered is questionable.

Anyway we look at it, we are screwed and we had better start thinking of how to protect ourselves from that imminent shortage while we have some time. For ordinary mortals like us, we can only stock up on candles and batteries for flashlights unless a cost effective solar solution for the household comes around soon. –Boo Chanco (The Philippine Star)