Congress, DOE set talks on emergency powers

MANILA, Philippines - The Department of Energy (DOE) and Congress are set to discuss President Aquino’s request for emergency powers to deal with a projected electricity shortage in Luzon in the summer of 2015.

Sen. Sergio Osmeña, who chairs the Senate committee on energy, has asked for a special meeting with Energy Secretary Carlos Jericho Petilla and Power Sector Assets and Liabilities Management (PSALM) president Emmanuel Ledesma Jr. to thresh out details on the grant of special powers.

Congressmen, meanwhile, want more details about Aquino’s proposed special powers.

“We will be meeting with Sen. Serge Osmeña. He agreed to it,” Ledesma said. “We will provide him with additional information and updates.”

Other lawmakers, however, urged Malacañang and DOE to submit the details of Aquino’s request for emergency powers to deal with the projected electricity shortage.

Isabela Rep. Rodolfo Albano III said no details have been submitted yet nine days after Malacañang sent Aquino’s request to the House of Representatives and the Senate on Sept. 12.

“We want to help the President, but we have nothing to act on. His letter-request is just a communication. It’s not a proposed law, it’s not a draft bill or a joint Senate-House of Representatives resolution containing the details of the proposed emergency powers,” he said.

Albano said if a bill or resolution were sent with the request, one or more members could have authored it and the two chambers could have referred it to the appropriate committees for hearings.

He pointed out that senators and congressmen cannot draft their own proposed law on emergency powers because they do not know the details of the special authority Aquino is seeking.

Malacañang, on the other hand, said it would just wait for the discussions between Congress and the DOE on President Aquino’s request for emergency powers, noting some lawmakers were questioning it.

Despite the reservations expressed by some lawmakers on the request, presidential spokesman Edwin Lacierda believes the legislature is also concerned about the looming power crisis.

“I think our government officials, both in the executive and legislature, are fully aware that there is possible power shortage. The position taken by the DOE is that we need to exercise or invoke Section 71 of EPIRA (Electric Power Industry Reform Act),” Lacierda said.

“The legislature may have a different view but we are certain that they are just as concerned in making sure that we address the possible power shortage in 2015. As to what the final proposal will be, let’s wait for the discussion between the House and Senate and the energy secretary,” he added.

The special powers, possible through Section 71 of the EPIRA of 2001, or Republic Act 9136, will enable PSALM to tap additional capacity for the summer of 2015.

Lacierda said the different views on averting a power crisis need to be discussed and threshed out as provided by law.

‘Time is of the essence’

Ledesma, on the other hand, revealed that PSALM, the government corporation tasked to privatize state-owned power assets, is already in talks with four to five suppliers of generator sets, which can provide the additional capacity, so that it can be ready if and when Congress approves the declaration of a state of emergency in the power sector.

“Time is of the essence,” Ledesma said.

“We are at the stage of accepting and evaluating proposals sent to PSALM and DOE in case Congress grants the request for emergency powers. There are around four foreign companies. We would need to secure 300 megawatts of gas and/or diesel generator sets. Factors to consider include comparative cost, delivery time, minimum O&M contract period required as well as availability of fuel,” he said.

Petilla proposed to invoke Section 71 of the EPIRA to allow PSALM to tap additional capacity next year.

Under Petilla’s plan, PSALM would rent bunker-fueled power facilities to fill the projected shortfall of 300 to 500 MW.

He said the Philippines would need 9,011 megawatts of power next year, higher than this year’s demand of 8,717 MW on the back of the projected growth in the economy.

Energy officials assured critics that Section 71 would be used only to tap additional power capacity and not for the government to take over power plants.

Last week, President Aquino asked Congress for emergency powers to allow him to solve a power shortage next year.

In a letter dated Sept. 12, Aquino called for the immediate enactment of a joint resolution allowing him to establish additional generating capacity.

He informed lawmakers that the DOE is predicting a “critical electricity situation” in the summer of 2015 due to, among other factors, the expected effects of the El Niño phenomenon and delays in the start of operation of “committed power projects.”

“There is no gainsaying that the imminent electric power shortage during these months is a real threat to the country’s growing economy and the general welfare of the people.

“The speedy enactment of the joint resolution will ensure the energy requirements of the country for this critical period – through a specific, focused and targeted acquisition of additional generating capacities for use during the limited periods of time of very tight energy supply,” the President said.

“This authority is needed in order to address the imminent shortage of electric power for the summer of 2015 in Luzon. I look forward to a favorable response from both houses (of Congress),” he said.

‘Not too fast’

Lawmakers, however, said they could not rush discussions on the request because the issue is complicated.

Senate President Franklin Drilon said the President’s letter was too “broad.”

Sen. Francis Escudero, for his part, is asking for information on the costs that the government and taxpayers will incur. Speaker Feliciano Belmonte Jr. has given assurance that Congress would not grant blanket emergency powers to the President, noting that the letter submitted by Malacañang did not contain enough details.

House Majority Leader Neptali Gonzales II said the request would be subjected to “a fine-tooth-comb scrutiny” to make sure that there is a credible basis for the grant of emergency powers.

He said the DOE should also look into other options instead of making taxpayers shoulder billions for additional power.

According to Gonzales, the proposed emergency powers may face rough sailing in the House.

He said many of his colleagues want the DOE to explore other options of dealing with the electricity shortage projected to last for only three months next year, instead of making people pay billions for additional power.

Gonzales said he and Speaker Belmonte have been informed that requiring malls and other big business establishments to use their generators in exchange for some incentives would free up about 1,000 megawatts (MW) that would be available to household users during next year’s summer months.

“Aside from this, we were told that there is an additional 125 MW that Petron Corp. can provide, plus 100 MW more from a natural gas plant that is scheduled to start operating before yearend. We can also resort to energy conservation measures,” he said.

“Clearly, there are alternatives other than making consumers pay billions,” he said.

However, Gonzales lamented that Secretary Petilla appears fixated on contracting additional power from foreign suppliers.

Albano, who belongs to the minority bloc and is a former executive director of the Joint Congressional Power Commission (JCPC), frowned upon DOE’s proposal to rent modular power plants from foreign contractors for P6 billion for two years to deal with a shortage forecast to last only for three months.

“Why should we make people pay P6 billion for three months, or P2 billion a month? Secretary Petilla will have a hard time justifying that proposition. I agree that we should explore other alternatives,” he said.

He said the DOE proposal is similar to the take-or-pay feature of supply contracts entered into by the Ramos administration and which resulted in higher electricity rates.

For his part, Cagayan de Oro City Rep. Rufus Rodriguez, who sits in the JCPC, faulted Petilla for recommending emergency powers only now that Luzon is projected to have a shortage in mid-2015.

“Mindanao has been experiencing real lack of electricity for the past two years as evidenced by continuous four to 10 hours of rotating brownouts all over Mindanao, which stunt its economic growth. Yet he did not recommend emergency powers to solve the energy crisis in Mindanao. Are we in Mindanao second class citizens?” he asked –Jess Diaz, Alexis Romero