Business World Online
Posted on October 20, 2014 11:17:00 PM
By Melissa Luz T. Lopez
Proponents had earlier set Oct. 29 as deadline for approval of a measure that would have given the Executive from March to June next year an arsenal of options ranging from an intensified energy conservation program to temporary acquisition of additional megawatts (MW) to plug a gap of as much as 900 MW.
During a hearing at the House yesterday, however, Energy Undersecretary Raul B. Aguilos told lawmakers the department was now open to relying primarily on the Interruptible Load Program (ILP) -- which compensates big electricity users that rely on their own generator sets in order to ease demand and supply the grid during peak hours besides -- provided the program gathers commitments for at least 700MW.
“What we are looking at right now is the ILP option. If we will get at least 700 MW signed up today, then we won’t have a problem,” Mr. Aguilos said.
Government lease or purchase of generators, which is expected to cost the state at least P6 billion, will be considered a “last resort,” he added.
On hearing Mr. Aguilos, House energy committee chairman Rep. Reynaldo V. Umali of Oriental Mindoro (2nd district) said there was no longer any reason to rush approval by next week of the joint resolution, which had been the subject of technical working group meetings since September.
“The only reason why we were trying to rush this was because we’re trying to beat the deadline... of contracting via lease,” Mr. Umali said.
Energy officials had said earlier the government would need six months to contract new capacities.
“If this is our direction, then there is no urgency to pass this joint resolution,” Mr. Umali said.
Mr. Aquino last month formally asked Congress for additional options, invoking the crisis provision of Republic Act No. 9136, or the Electric Power Industry Reform Act of 2001. That, in turn, set legislative wheels in motion to approve the envisioned joint resolution.
The draft resolution the Energy committee had prepared would be have to be revised, Mr. Umali said, moving his target for third reading approval by the House to Dec. 1.
The new resolution, he said, will focus on ILP and a reinvigorated energy conservation program.
Sought for comment, Senator Sergio R. Osmeña III welcomed the development. “That’s great. President Aquino won’t need authority to contract (additional megawatts),” Mr. Osmeña, who chairs the Senate Committee on Energy, said in a text message. “If all that it (joint resolution) contains is approval of subsidies (for ILP participants), then there is no rush.”
Mr. Osmeña had said earlier that ILP alone could plug the looming deficit -- a stand held by some business groups -- saying companies in Luzon have an estimated 3,163 MW in cumulative back-up power, equivalent to Manila Electric Co.’s (Meralco) 5,200-5,300 MW peak demand.
“[I]t’s like you have a reserve of 60%,” Mr. Osmeña had said.
As of yesterday, Meralco had secured commitments of 155 MW, and was looking at 81.16 MW more of additional supply.
During yesterday’s House hearing, Energy officials presented a revised power outlook for Luzon that showed the entire island would need at least 678 MW -- covering both shortage and minimum reserve -- in a worst-case scenario that could happen in the second week of April next year.
Some lawmakers expressed doubts on the gravity of the looming crisis, after an official of the National Grid Corporation of the Philippines said expected brownouts may last only for an hour each week from March to June.
“I think DoE has been painting the wrong picture in the past few months,” Bayan Muna Rep. Neri J. Colmenares said.
Business groups supported DoE’s preference for the ILP, saying this program should have been the focus from the start.
“Finally, they listened to us,” Philippine Chamber of Commerce and Industry President Alfredo M. Yao said in a phone interview.
“That is what we have been proposing to them since the first day.”
The European Chamber of Commerce of the Philippines (ECCP) expressed confidence that the private sector alone can bridge power gap. ECCP Executive Vice-President Henry J. Schumacher said in a text message: “I have always been confident that the ILP can reach 700 MW. Additionally, we are confident that energy efficiency investments can save 400 MW.”
John D. Forbes, senior adviser of the American Chamber of Commerce of the Philippines, shared this view, saying via text: “We hope an energy efficiency campaign can be energetically pursued along with an intensified ILP.”
Makati Business Club Executive Director Peter Angelo V. Perfecto said the group will continue to push for ILP commitments as part of short-term solutions, but emphasized the need for more permanent measures.
“We maintain that the projected gaps will have to be addressed by a combination of actions and short-term solutions like ILP, power supply agreements, and energy conservation as well as rehabilitation of Malaya (thermal plant) and taking steps to maximize output from other existing plants like Ilijan (in Batangas),” Mr. Perfecto said in a text message yesterday.
“Meantime, we must also develop urgently a long-term energy security plan that will make these gaps that lead to rotating brownouts hopefully a thing of the past.” source
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