Power crisis resolution filed

Business World Online
Posted on November 14, 2014 08:57:00 PM

LEADERS of the House of Representatives filed late on Thursday the joint resolution providing steps the President can take to plug the power shortage expected to hit Luzon next year, minus the option to buy or lease generators.

Among others, the resolution provides a “carrot-and-stick” scheme to encourage participation in the Interruptible Load Program (ILP), under which companies will run their own power generators in order to reduce demand in the grid during peak hours.

House Joint Resolution 21, authored by congressmen led by House Speaker Feliciano R. Belmonte, Jr. and Majority Leader Neptali M. Gonzales II, seeks to allow the government to establish additional generating capacities through the ILP and the fast-tracking of committed plants and other power projects.

The four-page resolution said the government now projects a need for 1,004 additional megawatts (MW) -- which includes a 404-MW contingency reserve -- between March and July in Luzon, which is estimated to account for about 70% of the country’s production.

“What we are trying to prepare for is the required reserves,” Oriental Mindoro Rep. Reynaldo V. Umali (2nd district) said in a telephone interview on Friday.

“I am confident that we will not have any brownouts, but there is risk of forced outages of plants that we cannot foresee.”

President Benigno S.C. Aquino III had formally asked Congress last Sept. 12 for special authority to ensure additional generating capacities come on stream in Luzon, including through the lease or purchase of generators, during 2015’s summer months by invoking the power crisis provision of Republic Act No. 9136, or the Electric Power Industry Reform Act of 2001.

Mr. Umali said he was confident that “remedial measures” provided by the resolution will suffice, rendering unnecessary the lease or purchase of generators. Some senators and at least one business group had cautioned against the option of contracting additional capacities, saying this would jack up already-high power rates that is a key investment disincentive.

Mr. Aquino has already conceded that time has run out for this option, as it takes about six months to contract additional megawatts.

Sought for comment on the finalized resolution draft, Presidential Communications Secretary Herminio B. Coloma, Jr. said in a text message: “EPIRA requires enactment of joint resolution so we will await final version that will be passed by both chambers of Congress.”

The resolution now gives companies up to Dec. 31 to sign up for the ILP. Those that do so will be reimbursed -- without having to pay value added tax for such payment -- for fuel expenses for use of their generators.

It also warns that “any entity with self-generating facilities which is not registered under the ILP may be manually de-loaded from the grid without compensation”.

The resolution also authorizes Malacañang to ensure that “adoption and execution of energy efficiency and conservation measures shall be pursued vigorously by both public and private sectors”, partly by requiring government offices to inform the Energy department of their respective programs.

It tasks the department to draw up rules and regulations to implement the joint resolution and requires Malacañang to report to Congress every month “on the efficiency and effectiveness of measures…”

Mr. Umali said the House Committee on Energy has set a hearing on the resolution on Nov. 18, confident it will be approved by the chamber by the end of the month. -- Melissa Luz T. Lopez source