President studying power gap ‘options’

Business World Online
Posted on July 22, 2014 11:33:40 PM

PRESIDENT Benigno S. C. Aquino III is considering an Energy department request to declare a power crisis, Malacañang yesterday said, given projections of a supply lack next year.

Mr. Aquino, Energy Secretary Carlos Jericho L. Petilla said following a meeting in the Palace, is “open to anything at this point.”

Communications Secretary Herminio B. Coloma Jr., told a press briefing that the President called for the meeting following Mr. Petilla’s recommendation that Section 71 of the Electric Power Industry Reform Act (EPIRA) of 21 be invoked.

The provision states that “Upon the determination by the President of the Philippines of an imminent shortage of the supply of electricity, Congress may authorize, through a joint resolution, the establishment of additional generating capacity under such terms and conditions as it may approve.”

Mr. Petilla has forecast a supply shortage of around 200 megawatts (MW) by May 2015 and says invoking Section 21 will allow the government to contract additional generating capacity.

Yesterday, Mr. Coloma said: “As early as now, it’s better that the matter be discussed and we consider possible options for that. Invoking emergency powers is just one of the options, that has not been decided yet, that’s still being discussed.”

“According to existing laws, the private sector has primary responsibility for providing new generation capacity. The government may step in only if there is an emergency so there is need for government to study at this point whether this course of action is warranted way ahead of the projected time of shortfall,” the Palace spokesman added.

Asked for a time frame on the decision, Mr. Petilla replied in a text message: “[The] President will make the announcement once he has decided.”

In a television interview, meanwhile, Mr. Petilla said he was looking to address a “short-term gap” with his Section 71 proposal, claiming that “come 2016, we have enough supply.”

Mr. Coloma noted that Mr. Petilla was proposing “an additional capacity of 200 to 300 MW,” adding that the forecast shortfall “may be incurred despite several new power plants being built and will go on stream starting the second half of 2015.”

Asked to comment, economist Benjamin E. Diokno said declaring a power crisis “might be counterproductive.”

“It might only raise uncertainty which might discourage potential investors in investing in power plants ... [the] focus should be on making sure that existing power plants are maintained in order to avoid breakdowns, as well as energy conservation,” he added.

Short-term measures to address the power shortage, Mr. Diokno said, could have a negative impact in terms of higher prices, which in turn will reduce purchasing power and trim gross domestic product growth “by as much as 1%.” -- Imee Charlee C. Delavin source