THE Aquino administration is leaning heavily toward the Interruptible Load Program (ILP) option that would tap high-powered generator sets (gensets) of private firms on a voluntary basis under a scheme where they would be recompensed for helping reduce an energy-supply shortage likely to trigger brownouts in 2015.
Malacañang Spokesman Edwin Lacierda indicated on Monday this was emerging as the favored option rather than lease costly gensets for fixed amounts likely to invite comparisons with “onerous” take-or-pay contracts during the Ramos-era energy crisis, where consumers were made to pay even for electricity they did not use.
Asked if the government had already fixed the amount it would need to draw from Malampaya funds to lease gensets for additional capacity to avert the 2015 brownouts, Lacierda told the BusinessMirror that energy officials are set to hold further talks with lawmakers on the funding issue, as well as other options to deal with the power-supply problem.
“Congress and [the] Department of Energy will be in discussions as to the best manner to address the power shortage in 2015,” Lacierda said. “Let us wait for all options to be threshed out.”
This, even as another Palace official, who spoke on condition of anonymity, confided that the estimated drawdown from Malampaya funds to bankroll government efforts to avert the power supply may eventually be “much lower” than the initial P6-billion estimate earlier made by energy officials for options to bridge the serious power-supply gap projected to hit Luzon by summer next year.
The lower cost estimate is likely to result if more private companies with big gensets opt to join the ILP to close the supply gap, with government assurance of cost recovery for participating companies.
Congress leaders, in the meantime, assured that lawmakers are working to fast track passage of a joint resolution requested earlier by President Aquino for authority to contract additional capacity to cut the serious supply shortfall.
“We must recognize and accept the fact that we need additional generating capacity in order to avert looming power crisis in the summer of 2015,” said Senate President Franklin Drilon. “Right now, we are looking at a shortage of 300 megawatts [MW].”
Drilon disclosed they are looking at the availability of “about 475 MW from new power plants and from the repair of existing power plants and another 275 MW or so from private generating sets.”
“So the shortfall we are looking at is approximately 300 MW, at ito po ang kailangan natin na gawaan ng paraan kung paano magkakaroon ng additional generating capacity. May authority sa Section 71 of the Epira [Electric Power Industry Reform Act] para po mabigyan ng kapangyarihan ang Pangulo na gumawa ng paraan para magkaroon ng additional generating capacity,” he added.
According to Malacañang, the Department of Energy had already received commitments from early volunteers who have enlisted to join the ILP, including SM malls.
Summer power-shortage potential loss
A LAWMAKER on Monday warned the Aquino administration of an estimated P81.6-billion loss in potential income for Luzon if the looming power shortage remains unacted upon by Congress.
Nationalist People’s Coalition Rep. Sherwin Gatchalian of Valenzuela City said the administration should expedite its decision in solving next year’s projected power shortage, saying the country stands to lose P81.6 billion if no resolution is reached by the end of October.
“Time is running out for Luzon as the specter of a power shortage threatens the country’s center of commerce, which contributes a lion’s share of the country’s yearly gross domestic product [GDP],” he said.
“According to our rough estimates, the country will lose P81.6-billion in potential income from production in Luzon next year if the government, especially Congress, does not come up with an immediate solution to avert the crisis,” added Gatchalian, a senior vice chairman of the House Committee on Metro Manila Development.
The lawmaker said the projected income loss in Luzon is equivalent to 1.2 percent of last year’s real GDP of P6.76 trillion.
“[In computing the lost potential income]…we multiply the [expected] power shortfall, [which is expected to reach 952,560 megawatt-hours by the respective power consumption rate [at 85,692 MWh] to obtain the estimated reduction in GDP, which results to around P81.63 billion, or 1.21 percent, of 2013’s real GDP of about P6.8 trillion,” he said.
The numbers obtained are converted from megawatt to megawatt-hour by multiplying the respective megawatts value by 168, the number of hours in a given week, he added.
Aside from the loss of potential income, other effects include increased risks to health, detrimental effects on the school performance of children, lower foreign direct investment levels and increased consumer prices, Gatchalian added.
If Congress will comply with the Executive’s request for emergency powers in accordance with the Epira, both houses will have to immediately pass a joint resolution for the grant of such power because the purchase or lease requires at least three months, the lawmaker said.
He added the other option favored by the Lower House is the grant of perks to prospective ILP participants.
Last month President Aquino asked Congress to grant him emergency power that will allow him to contract additional power capacity to avert the looming power crisis in summer next year.
Mr. Aquino cited Section 71 of the Epira, which states that, “Upon 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.”
But House House leaders deferred the filing of the of the joint resolution granting Mr. Aquino emergency power to contact additional capacity. Instead, they agreed to hold an investigation—through House Resolution 1533—into whether there is really to vest Mr. Aquino with such power.
The energy committee is now conducting hearings to discuss the resolution.
Fund
MEANWHILE, House Speaker Feliciano Belmonte Jr. said the lower chamber is now seriously considering empowering President Aquino to utilize the Malampaya Fund as subsidy to spare the public from paying the expected additional cost of electricity in summer next year.
“Yes, it’s [tapping Malampaya fund] an option,” Belmonte said.
Liberal Party Rep. Reynaldo Umali of Occidental Mindoro, chairman of the House Committee on Energy, said tapping the fund would be part of the emergency powers that Congress is considering.
“If the source is Malampaya, then there is no additional burden to consumers,” Umali said in an interview after Drilon disclosed that Congress will authorize President Aquino to tap about P4 billion to P10 billion from the Malampaya Fund.
Jovee Marie N. dela Cruz