Emergency powers will NOT solve the real power crisis

Emergency powers will NOT solve the real power crisis

Oktubre 16, 2014 

Atty. Aaron Pedrosa

Secretary-General, SANLAKAS

The government-forecasted power crisis has triggered a frenzy in the officialdom to scamper for emergency powers as its solution. No less than President Benigno Aquino III now seeks congressional imprimatur through a joint resolution of both chambers –the Senate and House of Representatives – to abate an imminent shortage of electricity supply invoking Section 71 of Republic Act 9136 or the Electric Power Industry reform Act (EPIRA) of 2001.

Under the same provision, the determination as to the existence of an “imminent shortage” of electricity supply is solely lodged on the Chief Executive who may then be empowered by Congress through a joint resolution to establish additional generating capacity to augment the expected power deficit.

This begs the question: Is there really a “power crisis” as a consequence of a significant lack of power supply? For even the head of the Joint Congressional Power Commission (JCPC), Sen. Serge Osmena, declares that there is no power crisis.

According to the Energy Department’s projection a spike in demand from 8,717 MW for 2014 to 9,011 MW during the first half of 2015 will require an additional 400-500 MW generating capacity to absorb the increased power requirements in Luzon.

What is not explicitly explained to the public is that the shortfall will be due to the scheduled preventive maintenance shutdown of the Malampaya gas production facilities in March 2015. The shutdown will then set in motion the fall in electricity supply in Luzon. What the government intends to do is to rent out power barges and diesel generation sets at an estimated contract price of P14Billion for a two-year lease. This short-sighted approach does not address strategic problems plaguing a deregulated power industry. It at best diverts the public from two things: firstly, that the so-called power crisis is contrived; and secondly, it overshadows the real power crisis that has defined the industry for more than a decade now.

In the present set-up, energy officials, power producers and distribution utilities determine the demand and supply forecast for the power sector. This forecasting modality is usually based on a projected economic growth based on the demographics of a certain locality. The totality of these projections is embodied in the government’s Philippine Energy Plan (PEP) which paints a 30-year planning horizon. The forecasting in itself is an exclusive domain for power players and providers leaving out other stakeholders especially the consumers. No one can therefore contest the figures being fed to the public. On a parallel plane, the President’s determination of a power shortage by 2015 is one based on conjecture absent the substantiation of the power crisis being asserted by the administration.

To address the “power crisis”, other government officials offer short-term solutions such as accessing the 3,900 MW “embedded power” or idle power from private firms an arrangement which according to Rep. Reynaldo Umali will only cost the government P200M. Another proposal is the interruptible load program (ILP), a voluntary scheme which would entail a self-impose drop in consumption from participating firms such as malls, industries, among others. Yet, another proposal is the immediate repair of the Private Sector Assets and Liabilities Management Corporation (PSALM)-owned 650 Malaya thermal plant for it to yield an additional 300MW by 2015.

Truth be told, these proposals will never prosper for EPIRA dictates that government cannot provide itself greater stake in power generation. Rather, the overarching principles embodied in the EPIRA, directs the government to relinquish this to the private sector. Thus, the government abrogated its responsibility of providing for the power needs of the people in favour of corporations and private interest and now responds in the same fashion to address its self-declared power crisis, a crisis of its own making.

Completing the picture are twenty-six approved coal plant projects that will be built from now until 2020. With the recent setback experienced by the government with the issuance of a temporary environmental protection order (TEPO) against the 300 MW Redondo coal plant project, the grant of emergency powers will ensure that any legal challenge against these projects will be effortlessly warded off thus ultimately ensuring that the spadework for their construction will be unhampered and unchallenged. Twenty-six coal plants on top of the seventeen existing plants will lock in the country into coal dependence.

All these intramurals on the grant of emergency powers overshadow the real power crisis that has beset the sector for more than a decade now. To date, 2.7 million households remain without access to electricity; the country’s power rates are the most expensive in Asia and rank fifth in the world; market manipulation and collusion are at its worst with prices being manipulated in the Wholesale Electricity Spot Market (WESM), defying a cornerstone promise of EPIRA – of providing affordable and reliable electricity to the people. More than 13 years after EPIRA was passed, five families control the power industry.  

Emergency powers will only result in socializing more obligations that the government intends to pursue. To this day, we are paying for the take or pay provisions and sovereign guarantees extended by the Ramos Administration when it was granted emergency powers allowing it to enter into lopsided supply contracts with independent power producers. That burden will be augmented with the proposal to enter into contracts with private firms for the lease of their generation sets. It is the people who will in the end foot the bill.

To add insult, we are reduced to a more vulnerable state in the context of climate change with the approval of 26 privately owned coal plant projects. Coal plants are the greatest emitters of carbon dioxide whose heavy concentrations in the atmosphere drive climate change. Even as a country battered with the strongest typhoon in recorded history to make landfall, the Aquino Administration opts to look the other way, oblivious to the realities of climate change impacts experienced by countries like the Philippines which is among the most vulnerable to climate change.

The power crisis is bigger than a mere projected shortfall. It requires a solution that recognizes the failure of a paradigm that puts the burden of providing for our power needs in private hands. Emergency power is not the solution.

Repeal EPIRA Now!

Resist Coal!

Resist Emergency Powers!