Energy watch: No need for emergency powers

MANILA, Philippines - Government Watch led by industrialist Raul Concepcion is urging the government to implement other solutions to avert the looming power shortage next year instead of declaring a state of emergency in the power sector.

While he recognized the power shortage that could cripple next year’s economic growth, Concepcion said there are other solutions the government can implement instead of invoking Section 71 of the Electric Power Industry Reform Act of 2001 (EPIRA), the landmark power reform law.

Earlier, Energy Secretary Carlos Jericho Petilla proposed to invoke Section 71 of EPIRA, which would give the President emergency powers to address next year’s critical power supply.

Under a state of emergency, the government would be able to rent bunker-fired power generators to provide additional power capacity.

But instead of declaring a state of emergency, Concepcion said the government can conduct “full and accurate auditing of existing power plants, carefully manage the scheduling of maintenance shutdown so that overlaps are avoided, conduct inspections to see if these plants are being properly maintained and impose heavy penalties on violators.”

 The group also noted that power generators that exceed their outage allowances should be required to source power at contract cost, regardless of source, instead of passing through the higher cost from the Wholesale Electricity Spot Market (WESM), the country’s trading floor for electricity.

They also urged the government to address permitting issues and other bureaucratic impediments, so that new power plants come online as scheduled.

Furthermore, the group said the government should fast-track the rehabilitation of one unit or 300 megawatts of the Malaya Thermal Power plant in Rizal in time for summer 2015 and facilitate the entry of the 100 MW Avion natural gas plant of First Gen Corp. to early March instead of April 2015.

The government should also continue to implement the interruptible load program (ILP), which proved effective during periods of tight supply in the Visayas and Mindanao.

“In the midst of a looming power shortage in 2015, Gov’t Watch appeals for sobriety. While the threat is real, there are solutions, many of which do not involve granting the President emergency powers,” they added.

Government Watch warned that rotating blackouts that could hit the country next summer would be bad for the economy.

“If the power supply situation does not improve we may be faced with a power crisis that could cause higher electricity prices, or worse, rotating brownouts during the summer months in 2015. We must act now in order to avert an energy crisis in 2015,” the watchdog said.