ENERGY officials on Tuesday stressed the need for Congress to still issue a joint resolution that will authorize President Aquino to deal with the looming power crisis in 2015, a day after they were apparently misunderstood by lawmakers during the House Committee on Energy hearing on Monday.
Energy Undersecretary Raul Aguilos, Director for Electric Power Industry Management Bureau Myleen Capongcol, and Assistant Director Irma Exconde said in a news conference that the country still needs Congress’s approval to invoke Section 71 of the Electric Power Industry Reform Act (Epira) in order to address the power crisis that will hit Luzon during the summer months next year.
A draft of the resolution submitted by the Department of Energy (DOE) seeks to grant the President an authority to negotiate contracts for the acquisition of additional generation capacity either via lease or purchase
Epira prohibits the government from putting up power plants. However, Section 71 of the said law states that the President, upon determination of an imminent shortage of supply of electricity, may ask Congress for authority, through a joint resolution, to establish additional generating capacity under such terms and conditions.
“We need Section 71. What was presented on Tuesday during the hearing was the best-case scenario for 2015,” Aguilos said.
The lawmakers were under the impression that there is an anticipated 1,200 megawatts (MW) of shortfall, translating to up to eight hours of daily rotational brownout.
But during the hearing on Monday, the same energy officials told the congressmen that the shortfall would only amount to 31 MW, at most, at any given day from March to June next year.
Therefore, the congressmen concluded that there is no urgency to issue the joint resolution that was supposedly targeted to come out by end of this month. Instead, they said, the Interruptible Load Program (ILP) will suffice because there is no need for emergency powers to address the situation.
What they failed to thoroughly explain during the hearing was that aside from the projected 31 MW of anticipated daily generation deficiency, the country is in need of three kinds of power-reserve requirements—regulating reserves, contingency reserves and dispatchable reserves.
Capongcol said a 350-MW regulating reserve is meant to ensure the system reliability of the power grid; 647 MW for contingency reserve, which is equivalent to the highest online power plant when it suddenly conks out; and another 647 MW of dispatchable reserve for offline plants that can be switched on when power supply falls.
“Ideally, we need to raise all these kinds of reserves but since it is too huge, we are eyeing to meet only the contingency reserves of 647 MW,” Capongcol said. Given this, the Luzon grid is in need of 678 MW to cover for the 647-MW contingency reserve and 31 MW of deficit.
The DOE officials said it has received firm commitments from industry stakeholders an additional 424 MW of capacity but this was already factored into its computation.
“We have a power-supply problem of 700 MW. We already factored in the additional capacities that will come in. We need even more than 700 MW in order to satisfy the regulated reserve. That is what we need,” Aguilos said.
For now, the government is banking on the ILP to cover the needed 700-MW capacity.
Under ILP, its participants will be called upon to voluntarily use their respective generating sets. Through this, power supply from the grid that will not be consumed by participating customers will be available for use by other customers within the franchise area. Thus the aggregate demand for power from the system will be reduced to a more manageable level, helping ensure the availability of supply during the season.
But so far, the Manila Electric Co. (Meralco) has so far signed up 155 MW of accumulated committed interruptible load capacity from various ILP participants. Meralco is the largest distribution utility in Luzon.
The DOE, however, said that only half of that capacity will turn out as actual capacity that can be de-loaded based on previous incidents.
When sought for comment, Energy Secretary Carlos Jericho L.Petilla said he is confident that more will participate in the ILP soon. “We will be scraping from the bottom of the barrel to make up for what we need,” he said.
He added that, when the time comes when ILP will be able to cover for the needed capacity, then he would not have second thoughts to recall the emergency powers, should Congress grants the President.
“I am not for Section 71 absolutely. If there is enough capacity then I will be more than happy to recall Section 71. But for as long as we haven’t completed what we need then I have to push for it. Maniniguro muna ako. I have to keep that option,” Petilla said.
Rely on ILP
THE House of Representatives wants the Aquino administration rely on ILP to address the looming power shortage next year, according to the draft resolution granting President Aquino emergency powers.
Based on the latest draft of the House resolution, authorizing the president to establish additional generating capacity to effectively address the projected electricity shortage in 2015, the DOE projects a critical power shortage estimated at 700 MW to occur in March to July 2015 consisting of 14 weeks yellow alert and two weeks of red alert for a total of 16 weeks of approximately one hour of brownouts for one day per week.
The draft resolution added that to authorize the President of the Philippines to provide for the establishment of additional power-generating capacity as a strategic response to the need for specific, focused and targeted acquisition of additional energy capacities to meet the critical threat of electric power shortage estimated at 700 MW from March to July 2015, the following terms and conditions will be implemented:
Provision and procurement of additional generation capacity shall be available on or before March 1, 2015.
Additional generating capacity shall be preferentially sourced from the ILP, fast-tracking of committed projects and plants for interconnection
Adoption and execution of energy and conservation measures shall be pursued as further fallback mechanism.
It said that to stimulate additional generation capacities, private entities with self-generating facilities are hereby encouraged to participate voluntarily in the ILP on or before December 1, 2014.
“Provided, that the government shall reimburse the owners of SGFs or backup generators for fuel expenses and reasonable recovery for their use in accordance with ERC [Energy Regulatory Commission] rules and validated by the distribution utilities,” it said.
‘Absence of substantiation’
THE joint resolution granting President Aquino emergency powers to address the looming power crisis in summer next year has been opposed by various groups, claiming his determination of a shortfall in electricity supply is based only on “conjecture absent of substantiation.”
“Essentially, what we are saying is that the emergency powers will not solve the real power crisis,” Sanlakas Secretary-General Lawyer Aaron Pedrosa told the BusinessMirror, citing that this will only redound to socializing more obligations that the state plans to pursue.
It was noted that last month, Mr. Aquino asked Congress to give him emergency powers to address the power crisis in 2015.
(With Jovee Marie N. dela Cruz, Rod Abad, Recto Mercene)