Business Mirror
22 Aug 2014 Written by Lenie Lectura
The Management Association of the Philippines (MAP) strongly urged the government on Friday to consider its proposed energy-efficiency measures to address the power-supply deficiency next year.
“MAP urges the government to aggressively carry out programs which encourage demand-side management in the form of energy-efficiency measures implemented by everyone to reduce power usage,” the group said in a position paper.
MAP also supports the voluntary implementation of the Interruptible Load Program (ILP) in which participating companies with private gensets are compensated for their fuel and other variable costs.
But since ILP is voluntary, MAP said the government should be allowed to contract additional generating capacity to a maximum of 300 megawatts (MW) for a period of two years only.
“Only in the event that there is no guarantee that the foregoing measures would adequately address the impending shortage should government be allowed to contract additional generating capacity under Section 71 of the Electric Power Industry Reform Act [Epira],” MAP said.
Earlier, MAP Energy Committee Chairman Ernesto Pantangco recommended the limited implementation of Section 71.
Epira prohibits the government from putting up power pants. However, Section 71 of the said law states that the President, upon determination of an imminent shortage of supply of electricity, may ask for Congress for authority through a joint resolution, to establish additional generating capacity under such terms and conditions may approve.
The group also suggested a five-member committee, composed of designated representatives of knowledgeable business groups, to monitor the implementation of Section 71.
In addition, MAP urged the Energy Regulatory Commission to lift the secondary price cap in the Wholesale Electricity Spot Market, as this deters the entry of new and existing peaking plants by effectively disallowing them from recovering fuel costs.
MAP also reiterated that there is no need for the government to amend Epira. “We are, likewise, cognizant that several bills have been proposed for the purpose of amending the Epira. We wish to reiterate MAP’s previous position that the Epira should not be amended at this point as it would not solve the country’s most pressing concern—lack of power supply. Some proposed changes can be made by amending the Epira Implementing Rules and Regulations, but amending the law itself would only introduce uncertainty into the regulatory regime of the power industry. International and local investors and financial institutions would not invest in an industry where the rules are not known and stable.”
Moreover, MAP said that, after it reviewed the proposed Department of Energy circular entitled “Directing the Transition to the Independent Market Operator of the Wholesale Electricity Spot Market,” the said circular does not fulfill the mandate of Epira.
“Equally worth noting is the fact that the proposed IMO in the circular did not obtain the endorsement of the electric-power-industry participants as mandated by the Epira. For these reasons, we reiterate our previous objection to the proposed IMO,” it said.
A power-supply shortage of about 300 to 500 MW by summer of 2015 is imminent. This shortage will be further compounded by the maintenance shutdown of the Camago-Malampaya gas field, which will reduce the Ilijan power plant’s capacity from 1,200 MW to 450 MW. source
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