Palace hopeful Congress will pass resolution on Noy’s special powers

MANILA, Philippines - Malacañang hopes the Senate and the House of Representatives would soon come up with a joint resolution granting President Aquino emergency powers to deal with the looming power shortage next year.

Presidential Communications Operations Office Secretary Herminio Coloma Jr. said yesterday the Joint Congressional Resolution  would come into being after the Senate passes its version of the resolution passed by the House of Representatives.  

“We hope that it would be passed as soon as possible for the welfare of the nation,” he said in Filipino. “We need time to prepare for the expected shortage in power reserves in the coming hot season in 2015.”

The Senate and the House are expected to vote in plenary this week the resolution granting emergency powers to Aquino to deal with a looming energy shortage in Luzon next year.

The House committee on energy has approved Joint Resolution 21.

Proponents described it as a cost-effective alternative to Aquino’s original request from Congress in September.

The centerpiece feature is the interruptible load program (ILP) in which large commercial and industrial establishments will disconnect from the grid and use their own generators during peak hours to free power for use of households and other small users.

The government will compensate firms participating in the ILP for fuel use and other operating costs and grant them exemption from the value-added tax for certain expenses connected to the program.

House committee in energy chairman Reynaldo Umali said the ILP’s cost is not expected  to exceed P200 million.

“The beauty of the ILP is that we only pay if the generators are used,” he said. “If there are no brownouts, then we don’t pay.

Umali said the ILP’s cost can be covered by proceeds from the Malampaya gas wells in Palawan. Companies, including some government-owned and controlled corporations, have until Dec. 31 to sign up for the ILP, he added.

The government has police powers to enforce the ILP, Umali said.

Repair and rehabilitation

Isabela Rep. Rodolfo Albano III has urged the DOE to speed up the repair and rehabilitation of the two government-owned Malaya power plants in Pililia, Rizal and run them to ease the forecast shortage.

“Operating the plants, which have a combined capacity of 650 megawatts (MW), will provide ample support to ILP,” he said.

Albano said it is not right for the government to ask the private sector to run its generators while it is not operating its own power plants.

“The administration will have more moral ascendancy to ask for sacrifice on the part of businessmen if it can complete the repair of the two Malaya plants in time for next year’s summer,” he said.

One plant has not been running since March this year due to turbine issues, while the second plant is being overhauled, with the job to be completed next month, he added.

Albano said the 650-MW capacity of the two plants is more than the 530 MW that scores of companies led by Ayala and SM malls have committed to the DOE and Meralco to free up when supply becomes tight next year by running their own generators.

“The DOE should be able to work double time to procure turbines or parts and finish the overhaul of the Malaya plants to complement ILP and ensure that Luzon will have a steady and stable supply of electricity between March and July next year,” he said.

Albano said an ILP participant should be reimbursed only for the difference between the cost of operating his generator and the electricity he would take from the Luzon grid and pay for if he did not run his equipment.

“The government cannot return the entire cost of fuel, because that would mean that the ILP participant will be getting his electricity free of charge, courtesy of taxpayers,” he said.

Albano said the reimbursable fuel cost of a company running its own generator should not be much, because it will be exempt from the 12-percent value added tax and will not be subject to a transmission charge and other taxes and fees a consumer connected to the grid pays.

The DOE and the Energy Regulatory Commission must have a ready formula on how to compensate ILP participants for legitimate expenses, Abano said. 

‘Special powers not needed’

Research group Ibon Foundation said yesterday special powers are not needed for the ILP.

“In fact, Energy Secretary Jericho Petilla was already broaching the idea of using ILP in Luzon as early as January this year,” Ibon said. “The idea then was to mitigate the impact of price spikes in the Wholesale Electricity Spot Market (WESM). There was no mention of needing emergency powers for the President.”

Ibon said the Department of Energy (DOE) has already implemented the program in the Visayas and Mindanao “without requiring presidential emergency powers.”

“The real intention of granting emergency powers may be to promote the interests of big power firms whose projects have been delayed or mothballed because of regulatory and other issues,” Ibon said.

Ibon said the joint resolution endorsed by the House committee on energy last week authorizes Aquino to suspend various laws and regulatory requirements, including the Clean Air Act and the Bio-fuels Act, to fast-track the operation of power plants that are under construction.

A planned coal-fired power plant in Subic, which the Supreme Court has stopped, might be revived with the use of Aquino’s emergency powers, Ibon added. – With Jess Diaz