New energy czar Angelo Reyes would do well to take a paradigm shift on the matter of energy and take the view that what is inherently good for the previous department he headed is not necessarily the right focus for the new department he is in now.

While he was able to correctly assess the problems confronting the mining sector then—the entry of more investments and environmental concerns—the energy issues are fraught with uncertainties, the kind that now bedevils the stock market.

Spewing quite a mouthful the moment he assumed his new post, he came out with cute statements on nuclear power, natural gas and the revision of the Electric Power Industry Reform Act (Epira).

That was impressive; the quick grasp of the situation, signaling his hands-on take on the energy issues, his rapid-fire headline items on renewable energy and the resurrection of the moth-balled nuclear power plant.

They seemed cute, but there are other “headline” items that should be given priority

First is power supply. It may have been forgotten that the capacities of power generators in the country have not significantly expanded. Four years ago, capacities stood at a mere 38,926 gigawatts per hour, of which 60 percent is for Luzon consumption.

The economy must have moved since 2003. And if those capacities have not expanded, then a looming power shortage is more real than imagined. Therefore, Secretary Reyes should attend to the expansion of generating capacities.

Taking the beating in the stock market as a point of reference, Secretary Reyes should dwell on the realm of possibilities on the risks associated with an unexpanded power supply. Any breakdown in one or two of the power plants could cause energy shortages that could cripple the country’s industries.

For starters, the new energy chief might wish to investigate why the privatization of the generation assets of the National Power Corp. (Napocor) has not taken off as fast as it should. He might wish to do a thorough probe of the willingness of the Napocor bureaucracy to let go of this gold mine and let the private sector run its assets and expand its capacities.

The Napocor privatization pace is way, way behind schedule. It is a blessing that our economy had not zoomed as fast it was initially projected. Otherwise, power supply would not have coped with astronomical demand and, ergo, result in blackouts.

Also, Secretary Reyes should not rely too much on his advisers, who are creating unreasonable expectations by saying that amendments to Epira could bring about lower power rates. This is too simplistic and betrays the new energy boss’s lack of familiarity with the landscape of the industry.

If he wants to give us reasonable power rates, he must first slay the Napocor dragon. We are reeling from the back collection of Napocor rate hikes that are being collected by distribution utilities now.

More than 50 percent of our power bills is generation charges. The secretary might do well to deal with Napocor with an iron fist and give the consumers a breather from expensive power rates.

Reduced dependence on imported energy is another priority item which Mr. Reyes may have failed to include in his initial spew. Along this line, the new energy czar might wish to revisit a government move to extract the rich crude-oil deposit lying underneath the natural gas layer of Malampaya.

He needs to revive this soonest because that crude oil deposit has a specific life span. After a certain period, it can no longer be extracted because of reduced pressure. Again, one of those uncertainty issues that one should grapple with, especially for the energy sector, where risk is much pronounced.

So, before we become fascinated with energy from the sun, the ocean, the wind and biomass, let’s get hold of what is already staring us in the face. These should occupy Mr. Reyes’s priorities: energy generation capacity expansion and extraction of indigenous oil.

The nuclear plant revival, for all its headline-grabbing status, should be in the backburner for now; the most important issues that should be tackled now is wrestling with the possibility of energy shortages.  

In all of these undertakings, the secretary should realize soonest that he needs all the help he can get if he wants his programs to take off, both the cute and the noncute ones.

The energy sector just has too many stakeholders and is so fraught with uncertainty issues. Besides the immediate extraction of Malampaya oil, the lack of new capacities could spawn power outages, the likes of which have been unseen since 1992.

For starters, we suggest the secretary to consider working closely with Sen. Miriam Defensor-Santiago instead of playing hardball with her. The senator definitely knows what she is talking about when it comes to energy matters and energy-related legislation. The new energy chief must admit that at this point, Sen. Santiago’s grasp of the energy sector is by far superior.

And since it looks like the President would not change her mind on Secretary Reyes’s designation to the energy post, the former military general might wish to learn a thing or two on the meaning of productive collaboration. After all, that is what wins wars.

E-mail: hugagni@yahoo.com

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New energy czar Angelo Reyes would do well to take a paradigm shift on the matter of energy and take the view that what is inherently good for the previous department he headed is not necessarily the right focus for the new department he is in now.

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