House panel rejects Noy’s emergency powers

Published by rudy Date posted on October 22, 2014

MANILA, Philippines – President Aquino will not get the kind of emergency powers he wants Congress to grant him to deal with a supposed electricity shortage in Luzon in the summer of 2015, the chairman of the House energy committee said yesterday.

Mindoro Oriental Rep. Reynaldo Umali told a news conference that the special authority the President is seeking to rent or buy generators from foreign suppliers, which could cost taxpayers up to P12 billion, would no longer be granted.

“The rent-or-buy option to establish additional generating capacity is already out. We are now focusing on ILP (interruptible load program),” he said.

The program seeks to encourage business establishments to run their own generators during peak demand periods from March to June 2015, instead of getting their supply from the Luzon grid.

That would free up electricity that would be available to household and other small users to avert rotating blackouts.

“It’s not us who foreclosed the option to rent or buy generators. It was the DOE (Department of Energy) which withdrew that option in yesterday’s hearing,” Umali said.

He was referring to the DOE report that electricity supply for next year’s summer months would be enough and there would be a shortfall of 21 megawatts to 31 MW only for the first and second weeks of April.

A representative of the National Grid Corp. of the Philippines told the committee that such shortfall would translate to a rotating blackout of just one hour a day in a week.

The DOE earlier predicted that there would be blackouts of up to eight hours a day due to a supply gap it estimated at 800-900 MW.

Umali said the private sector has been responding positively to the government’s call for participation in ILP.

He said as of last count, ILP participants could free up 847 MW to other users by running their own generators.

He said this amount of power alone would be sufficient to meet the forecast shortfall of 21-31 MW for two weeks in April, plus a desired reserve of 647 MW.

“We are trying to enlist more participants so that we can have a larger reserve just in case any plant breaks down,” he added.

For Bayan Muna Rep. Neri Colmenares, there is apparently enough supply based on data presented by the DOE during last Monday’s hearing.

“Emergency powers should not be granted, especially if it has no factual basis because it will result in higher prices of electricity. While we should look for solutions if there is an impending crisis, we should guard against short term knee jerk solutions that make energy costly,” Colmenares said.

Absorbing ILP cost

Responding to questions, Umali said Meralco and other stakeholders have estimated that the ILP option would now cost only eight centavos per kilowatt-hour, or about P80 million a month, down from the original figure of P200 million.

He said his committee would recommend that the government absorb the P80-million cost so that there would be no increase in the electricity bills of consumers.

“That’s why we still need the joint resolution because if we do not pass that, we cannot make the government shoulder the cost, which will then have to be passed on to consumers,” he said.

He added that the money would be used to compensate business establishments that would run their own generators.

“I think this amount will still go down because in the DOE report, there are only two weeks in April when there would be short supply and only two weeks in March when reserves would be thin. The rest of summer, there is less likelihood that we will tap much of ILP,” he stressed.

For his part, Isabela Rep. Rodolfo Albano III, one of the minority bloc’s representatives in the energy committee, said the DOE should be castigated for giving the President and the public the impression that the supply situation next year would be “critical.”

Aquino sent his request for special authority to the House and the Senate last Sept. 12.

He said the DOE predicts a “critical electricity situation” in the summer of 2015 due to, among other factors, the expected effects of the El Niño phenomenon and delays in the start of operation of “committed power projects.”

“There is no gainsaying that the imminent electric power shortage during these months is a real threat to the country’s growing economy and the general welfare of the people,” he said.

He said he would address the problem “through a specific, focused and targeted acquisition of additional generating capacities for use during the limited periods of time of very tight energy supply.”

“This authority is needed in order to address the imminent shortage of electric power for the summer of 2015 in Luzon. I look forward to a favorable response from both houses (of Congress),” he added.

Gen sets still best – DOE

At the DOE however, officials insisted the purchase or lease of modular generator sets is still an option to address a looming power shortage.

In a press briefing yesterday, Energy Undersecretary Raul Aguilos said that while the supply situation has improved, there is still a shortage of 700 MW. “That is a conservative estimate,” Aguilos said yesterday.

As such, Director Mylene Capongcol of the DOE Electric Power Industry Management Bureau said they are not dropping their proposal for the lease or rent of modular generator sets.

“We would still propose to include that option (gen sets). For the ILP, we need to know how much ILP can really contribute as well as the new power projects. Anyway, (the gen sets) would still be the last resort,” Capongcol said.

At Malacañang, Presidential Communications Operations Office Secretary Herminio Coloma Jr. said the administration is determined to “ensure stable supply and reasonably priced electricity for our people during the summer months of 2015.”

He said that while the power supply situation would not be as bad as earlier announced, it is still best for everyone to be prepared for any scenario.

“We should be prepared for the possibility of power supply shortage,” he said.

“Depending on the severity of the heat that will be experienced, that will determine actual demand or usage of electricity,” he said.

“We will continue working with Congress in providing an appropriate response and a satisfactory solution: stable and reliable supply at rates that are reasonable and not excessive or abusive,” the Palace spokesman said.

“We will not grope in the dark. That’s an important principle,” he said.

‘Brain power’

Meanwhile, consumer group People Opposed to Unwarranted Electricity Rates (POWER) said President Aquino’s request for emergency powers has become moot with the DOE’s admission that the supply situation would not be as bad as earlier expected.

“If a shortfall in the reserve of 21 and 31 megawatts in a week is all that the government aims to fill, there is more than enough supply,” POWER Convenor and former Bayan Muna congressman Teddy Casiño, said in a statement.

“Certainly there is no need to grant the President emergency powers to sign negotiated contracts worth P6 billion to P10 billion for 300-500 MW, as proposed by Secretary Jericho Petilla,” Casiño said.

“We are glad that the committee has realized this,” he added.

He said the DOE should now sit down with the NGCP, Energy Regulatory Commission and various stakeholders to come up with an action plan to increase the power reserves for next year. “What is needed here is brain power, not emergency powers,” he said.

In its position paper presented to the House energy committee, POWER proposed that operators of Malampaya and Pagbilao postpone their maintenance shutdowns to address the projected thinning of reserves. It also said that private power plants should be required to deliver on their dependable capacities from March-May 2015 as stipulated in their contracts.

“There is also a need to implement an aggressive energy saving and efficiency program for the same period as well as require privately owned generating sets to run during periods of acute shortage to complement existing supply,” Casiño added.

“These options, if properly implemented during the critical months of March and May 2015, will be enough to produce that additional 300-500 MW of reserve power without the President having to invoke emergency powers to enter into expensive, negotiated contracts,” the group pointed out. –-Jess Diaz (The Philippine Star)
with Delon Porcalla, Rhodina Villanueva

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