MAP urges implementation of energy efficient measures

MANILA, Philippines - The Management Association of the Philippines (MAP) is calling on the government to implement programs that would encourage energy efficiency measures as well as the voluntary Interruptible Load Program (ILP)amid the looming power supply shortage.

According to the MAP, in view of the looming energy supply crisis, the government should aggressively carry out programs which encourage demand side management in the form of energy efficiency measures implemented by everyone to reduce power usage.

“We likewise recommend the urgent implementation of a voluntary ILP, subject to adequate compensation to the participants,” the group said.

Under the ILP, qualified businesses would be compensated if they use their own generating facilities or sets during peak hours.

By using their own generating facilities, distribution utilities such as the Manila Electric Co. could reduce electricity supplied to participating businesses and serve other customers.

The MAP said government should only be allowed to contract additional generating capacity under Section 71 of the Electric Power Industry Reform Act (EPIRA) if any of the measures are not seen to address the impending supply shortage.

The group said any contracting of additional capacity must be limited to a period of two years and up to a maximum of 300 megawatts (MW).

“We further suggest that a five-member committee, composed of designated representatives of knowledgeable business groups, be convened to monitor the implementation of Section 71,” it said.

In addition, the group is recommending that the Energy Regulatory Commission lifts the secondary price cap in the Wholesale Electricity Spot Market (WESM) as such deters the entry of new and existing peaking plants by effectively disallowing them from recovering fuel costs.

“We are likewise cognizant that several bills have been proposed for the purpose of amending the EPIRA. We wish to reiterate MAP’s previous position that the EPIRA should not be amended at this point in time as it would not solve the country’s most pressing concern – lack of power supply,” the MAP said.

The group is of the view that  some proposed changes could be made by amending the EPIRA implementing rules and regulations without amending the law itself as such would only introduce uncertainty into the regulatory regime of the power industry.

International and local investors and financial institutions would not invest in an industry where the rules are not known and stable.

The group also noted that a careful review of the proposed Department of Energy Circular entitled ‘Directing the Transition to the Independent Market Operator (IMO) of the WESM’ would reveal that it does not fulfil the mandate of the EPIRA.

“Equally worth noting is the fact that the proposed IMO in the circular did not obtain the endorsement of the electric power industry participants as mandated by the EPIRA. For these reasons, we reiterate our previous objection to the proposed IMO,” the MAP said.

The MAP statement was made amid an anticipated power supply shortage of about 300-500 MW by summer of 2015.

The shortage is expected to be further compounded by the maintenance shutdown of the Camago-Malampaya gas field which will reduce the Ilijan power plant’s capacity from 1,200 MW to 450 MW.