PIPPA bucks creation of energy superbody

The Philippine Independent Power Producers Association (PIPPA) is urging the government to remain true to the vision of creating a competitive environment for the power industry through the proper implementation of the Electric Power Industry Reform Act (EPIRA). This, and not the creation of another layer of bureaucracy through EO 474, will solve the problems besetting the power industry.

PIPPA noted that recent developments in the energy industry have caused much uncertainty and concern for the industry players and prospective investors as well. Specifically, the creation of an energy "super body" through EO No. 474 is perceived as a major setback to the government’s thrust to privatize and sell the National Power Corp.’s (Napocor’s) assets.

The EO is symptomatic of a government wanting to go back to central planning, a policy that has only given the country disastrous results. It is also a complete reversal of EPIRA’s vision of creating competition which will eventually benefit the consumers; and government finally getting rid of the burden of heavily subsidizing Napocor.

On Nov. 30, 2005, President Arroyo issued Executive Order 474, creating a "super body" called the Philippine Strategic Oil, Gas, Energy Resources and Power Infrastructure Office, the "PSOGERPIO", to ostensibly "avert the fast approaching energy crisis." PSOGERPIO is tasked, among others, to identify and certify "national priority projects" and enter into agreements with private entities to undertake and realize these priority projects.

While the President has put the implementation of EO 474 on hold, calling for a review and further "fine-tuning" of the said EO, the PIPPA is still concerned about the damage the EO can inflict on the power industry should government finally push through with it.

The group said PSOGERPIO is yet another means by which government can re-regulate and control the industry. It is a "super body" — a government instrumentality that can decide which power projects will be developed, who will develop them, how they will be financed, PIPPA said. Its powers are as limited or as limitless as its imagination. By definition, it can effectively second-guess the ERC and render it powerless, it added.