Former DOE head urges gov’t to act immediately on RP’s power problems

Former Energy Secretary Francisco L. Viray is urging government to take immediate steps to solve the twin problems of uncompetitive power rates and power supply shortages.

In a recent forum on the power sector, Viray said power rates in the country remain one of the highest in the Asian region while there have been no significant investments that will ensure adequate power supply in the coming years.

Viray prescribed three measures that could plug these problems. The first option, he said, would be for government to continue putting up power plants, another option would be to encourage more build-operate-transfer or BOT contracts with the National Power Corp. (Napocor) as the sole buyer; and a more effective implementation of the Electric Power Industry Reform Act or EPIRA.

He said that since investors are still deciding on whether to put their money into the local power sector, the most feasible option at this point would be for government to properly implement the EPIRA.

"The proper implementation of the EPIRA is crucial because we have to consider that energy is a long-term game and as such, problems cannot be solved overnight. Solutions are planned and most importantly, have to be executed well to be effective.

Viray noted that building new power plants is not an attractive option for government that is struggling with fiscal deficit woes.

He warned however, that government has to start paying attention to potentially bigger problems that could arise from the lack of new power capacities to meet the growing power demand.

Previously, the Asian Development Bank noted that the country requires an additional capacity of 6,000 megawatts that would require capital investments of about $7.45 billion in the next 10 years if the country wants to ensure that the power crisis in the early 1990s is not repeated.

Napocor, which has yet to be privatized, is not in a position to undertake such projects because it has accumulated debts of about $10 billion and losses of more than P100 billion. Moreover, Republic Act 9136 has effectively prohibited Napocor from undertaking new power generation projects to prevent it from incurring new obligations.

Currently, its functions are limited to conducting missionary electrification projects in remote areas of the ocuntry, to operating and maintaining unsold power generation plants. Its transmission function was transferred to the National Transmission Corp.

Napocor said recently it is conducting an engineering study of baseload power projects that will be used as an investment guide for prospective private investors interested in building new power plants.

The study will be conducted for four priority sites, namely, Isabela and Ilocos Norte in Luzon, Cebu in the Visayas, and South Cotabato in Mindanao.

This developed as the Department of Energy said that a new consortium will be established for the purpose of setting up new baseload power plants to be financed through internally-generated funds.