(The Philippine Star) | Updated December 7, 2013 - 12:00am
In the next billing cycle, consumers will be treated to a surge in power costs. That will be on top of last week’s spike in LPG prices and an upward crawl in fuel prices.
There will be grumbling everywhere, to be sure, and some angry marches in the streets. Megaphones, however, have never been known to influence energy costs.
The forthcoming surge in power costs is temporary, authorities say. It is due to the simultaneous maintenance shutdowns of power plants using cheaper energy sources, such as the ones that run on natural gas from the Malampaya field.
The militants, waving their red banners, say this government is deliberately inflicting misery on the people. They demand royalties from the Malampaya field be used to subsidize power costs.
The Department of Energy (DoE), for its part, is suggesting there might be collusion among the power producers to create an artificial shortage and push prices up. It will, as this administration is wont to, launch an investigation into the matter.
If there is any failure leading to this impending surge in power costs, however, the DoE ought to take the major portion of the blame.
It should be the agency’s task to orchestrate things in the power sector, including maintenance schedules, to ensure reliable power supply using the most efficient cost structure. The clustered shutdowns of the most efficient plants that we see today should not have happened.
It is likewise the task of the DoE to ensure we have ample energy reserves. Over the past three-and-half years, no new power generation project was added to our energy stock. Rene Almendras, the man who failed to improve on our energy stock, was kicked upstairs to become secretary for the whole Cabinet as well as the impromptu spokesman for the chaotic disaster response in the wake of the super typhoon.
On a more strategic level, the task of the DoE is to ensure continuous improvement in the cost structure of the nation’s power supply. The cost structure determines the average cost of power generated by the mix of efficient and inefficient, green and dirty power producers.
If we improve the cost structure of our power supply, using more efficient baseload plants using natural gas instead of bunker oil, thermal instead of coal, our people will benefit from cheaper energy. We could become competitive in energy-intensive industries one again.
Alas, the cost structure for our power supply remains one of the highest in Asia. The maintenance closure of the more efficient plants means skewing the cost structure upwards, causing the energy price surge we anticipate. This is not good news for the economy.
Last Thursday, the first of what could be numerous street protests against the impending power price surge was staged before the main offices of Meralco. That is unfortunate. Meralco is only the distributor of power priced by the producers. The company collects from the end-consumers but does not determine pricing.
It is like attacking the bearer of bad news. What confronts us is a truly complicated energy problem that must not be oversimplified.
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