MANILA, Philippines - Energy Secretary Carlos Jericho Petilla has shrugged off a labor coalition’s call for him to resign, saying that he is committed to avert a looming power shortage in the summer of 2015.
“I won’t allow the blackouts to happen. I will do everything to fight it out because I know I am fighting for the people,” Petilla said in an interview.
He maintained that he did not deceive anyone when he said there would be a power shortage when he proposed to invoke Section 71 of the energy law last July to allow the government to tap additional power capacity through the purchase or lease of modular generator sets.
He explained that since he made the proposal in July and revealed the projected power situation next summer, additional capacity of some 437 megawatts was tapped.
“Before July, this did not exist. There was no 437 MW,” he said.
Petilla noted that President Aquino’s declaration of a state of emergency in the power sector summoned stakeholders and the private sector to cooperate and work together in finding solutions to the looming power woes.
A Trade Union Congress of the Philippines-led group called Nagkaisa has asked Aquino to fire Petilla for “deceiving the Filipino people with his manufactured power shortage scenario hitting the entire island of Luzon early 2015.”
The group said Petilla painted a wrong picture to justify the call for emergency powers.
“Secretary Petilla took the country for a ride. He bluffed the President, the Cabinet, the senators and congressmen, the business sector, the labor and consumer groups with his tall tales of thin power reserves to justify emergency powers that entail possible purchase of multibillion-peso generator sets,” Nagkaisa said in a statement.
But Petilla maintained that the power situation in the summer of 2015 is still critical with the shortage still at 700 MW, taking into account the need for reserves of 647 MW, which is the size of Sual, the biggest plant in Luzon.
“When it comes to power, supply and reserves go hand in hand,” he said.
The additional 447 MW will come from the First Gen Corp.’s Avion plant with 100 MW by April 2015, 36 MW from the upgrading of Millennium Energy’s Limay plant to be ready by March 2015, 20 MW as a result of the rehabilitation of the Bauang plant by March 2015, 10 MW from Petron’s Bataan plant to be ready by December 2014, 60 MW from JG Summit’s Batangas plant for commissioning in January 2015 and 20 MW from the Botocan hydroelectric plant in Laguna for completion in December 2014 for a sub-total of 246 MW.
The balance is estimated to come from participants of the interruptible load program. Under the ILP, big power users would use their own power to ease pressure on the grid.
Petilla said that while this is a good development, there is no guarantee that the committed capacities would come as expected and run smoothly.
“These are all photo finish. We don’t have control over this if something goes wrong, so it is very prudent for the government to have reserves,” he added. – By Iris Gonzales (The Philippine Star) With Mayen Jaymalin
Showing posts with label Interruptible Load Program (ILP). Show all posts
Showing posts with label Interruptible Load Program (ILP). Show all posts
Thursday, October 23, 2014
Blackouts could cost economy P23B – Aquino
IF an anticipated drop in power supply is not immediately solved and blackouts will occur next year, the cost to the economy could be as high as P23 billion, President Benigno Aquino 3rd warned on Wednesday.
Citing government estimates, Aquino said the economic cost of the feared power outages could reach a minimum of P9.3 billion to as high as P23.3 billion, excluding foregone revenues in sectors that will be affected by brownouts.
“[It depends] on the duration of the power outage. The lower figure [P9.3 billion] assumes power outage of two hours a day on average for three months. The higher figure [P23.3 billion] assumes a worse scenario of five hours a day also for three months,” the President noted during the Presidential Forum of the Foreign Correspondents Association of the Philippines.
This, he said, will likely dent the annual gross domestic product (GDP).
“The economic cost as estimated here pertains to output foregone, i.e. GDP loss from stoppage of economic activities. The estimate does not include foregone investment and tourist arrivals arising from the negative impact of the power outage on the country’s image as investment and tourist destinations,” Aquino added.
It is for these reasons, the President explained, that he had asked Congress for extra powers under the Electric Power Industry Reform Act (Epira) to address the situation on a “worst-case scenario” perspective.
“If there is no power come our summer months, there will only be one party that will be blamed, and that will be the executive. So we were asking from them various powers, not emergency, but these are really embodied already in Epira—to address the situation if and when El Niño is really severe, the forced outages in the trend that they have shown in the past two years also continue, to address also the cannot-be-postponed Malampaya shutdown, among other things,” Aquino said.
Although there are several options that the government can take, renting generators for about two years is no longer being considered because setting these up would take about six months.
The President said the Interruptible Load Program (ILP) is a “plausible substitute” but these standby generators for the most part have never been considered as baseload plants.
“What’s the difference? Standby generator, you run for a few hours. These ILP producers, in effect, will have to produce on a very regular basis, perhaps on a daily basis, if and when the reserve situation is seriously jeopardized,” he also explained.
Aquino said the Energy department balked on running the Malaya plants because they are 30 years old and it would be costly to maintain both plants.
Meanwhile, 49 labor groups and workers’ organizations called on the President to fire Energy Secretary Jericho Petilla for “deceiving the Filipino people” by manufacturing a power-shortage scenario.
The workers’ group Nagkaisa (United) was reacting to revelations during a recent congressional hearing where Energy officials admitted that the projected deficit in supply in 2015 is only about 21 to 31 MW, a far cry from the 1,200 MW shortfall trumpeted by Petilla.
“It is now very clear to us that Secretary Petilla took the country for a ride. He bluffed the President, the Cabinet and everyone with his tall tales of thin power reserves to justify emergency powers that entail possible purchase of multi-billion peso generator sets” Joshua Mata, a group convenor. said.
Another convenor, Louie Corral, executive director of Trade Union Congress of the Philippines-Nagkaisa, said the government should have acted as early as 2011 to avert a power crisis by building new power plants and exercising strong regulatory powers to prevent market fraud.
“The only time we will support emergency powers is when the government finally decides to take over the whole industry with the utmost objective of bringing down the price and securing a sustainable power supply not only for present needs but also for the next generations to come,” Corral added. - by JOEL M. SY EGCO SENIOR REPORTER AND JING VILLAMENTE REPORTER Manila Times
Citing government estimates, Aquino said the economic cost of the feared power outages could reach a minimum of P9.3 billion to as high as P23.3 billion, excluding foregone revenues in sectors that will be affected by brownouts.
“[It depends] on the duration of the power outage. The lower figure [P9.3 billion] assumes power outage of two hours a day on average for three months. The higher figure [P23.3 billion] assumes a worse scenario of five hours a day also for three months,” the President noted during the Presidential Forum of the Foreign Correspondents Association of the Philippines.
This, he said, will likely dent the annual gross domestic product (GDP).
“The economic cost as estimated here pertains to output foregone, i.e. GDP loss from stoppage of economic activities. The estimate does not include foregone investment and tourist arrivals arising from the negative impact of the power outage on the country’s image as investment and tourist destinations,” Aquino added.
It is for these reasons, the President explained, that he had asked Congress for extra powers under the Electric Power Industry Reform Act (Epira) to address the situation on a “worst-case scenario” perspective.
“If there is no power come our summer months, there will only be one party that will be blamed, and that will be the executive. So we were asking from them various powers, not emergency, but these are really embodied already in Epira—to address the situation if and when El Niño is really severe, the forced outages in the trend that they have shown in the past two years also continue, to address also the cannot-be-postponed Malampaya shutdown, among other things,” Aquino said.
Although there are several options that the government can take, renting generators for about two years is no longer being considered because setting these up would take about six months.
The President said the Interruptible Load Program (ILP) is a “plausible substitute” but these standby generators for the most part have never been considered as baseload plants.
“What’s the difference? Standby generator, you run for a few hours. These ILP producers, in effect, will have to produce on a very regular basis, perhaps on a daily basis, if and when the reserve situation is seriously jeopardized,” he also explained.
Aquino said the Energy department balked on running the Malaya plants because they are 30 years old and it would be costly to maintain both plants.
Meanwhile, 49 labor groups and workers’ organizations called on the President to fire Energy Secretary Jericho Petilla for “deceiving the Filipino people” by manufacturing a power-shortage scenario.
The workers’ group Nagkaisa (United) was reacting to revelations during a recent congressional hearing where Energy officials admitted that the projected deficit in supply in 2015 is only about 21 to 31 MW, a far cry from the 1,200 MW shortfall trumpeted by Petilla.
“It is now very clear to us that Secretary Petilla took the country for a ride. He bluffed the President, the Cabinet and everyone with his tall tales of thin power reserves to justify emergency powers that entail possible purchase of multi-billion peso generator sets” Joshua Mata, a group convenor. said.
Another convenor, Louie Corral, executive director of Trade Union Congress of the Philippines-Nagkaisa, said the government should have acted as early as 2011 to avert a power crisis by building new power plants and exercising strong regulatory powers to prevent market fraud.
“The only time we will support emergency powers is when the government finally decides to take over the whole industry with the utmost objective of bringing down the price and securing a sustainable power supply not only for present needs but also for the next generations to come,” Corral added. - by JOEL M. SY EGCO SENIOR REPORTER AND JING VILLAMENTE REPORTER Manila Times
Wednesday, September 17, 2014
Noy to Congress: Give me emergency powers
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| President Aquino is greeted by European Council President Herman Van Rompuy |
MANILA, Philippines - President Aquino has formally asked Congress for emergency powers that would enable him to address the projected electricity shortage next year.
Aquino made the request in a letter to Speaker Feliciano Belmonte Jr., a copy of which was furnished Senate President Franklin Drilon.
However, Drilon said it was impossible for the Senate to come up with the joint resolution by the end of September since Congress has only four plenary sessions left before it adjourns for a three-week break.
“We don’t even have the draft joint resolution. We don’t know the parameters of the authority being requested. We know the urgency, but we can’t rush into this,” he said.
The letter-request, dated Sept. 12, was included in the House order of business yesterday and sent to the rules committee chaired by Majority Leader Neptali Gonzales II.
“In accordance with Section 71 of Republic Act 9136, otherwise known as the Electric Power Industry Reform Act of 2001, I hereby seek the immediate enactment of a joint resolution authorizing the President to establish additional generating capacity,” Aquino said in his request.
He informed Belmonte and Drilon that the Department of Energy predicts 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 added.
Gonzales said they are reviewing the draft bill before referring it to the committee on energy. “We will attend to the President’s request with dispatch,” he said.
Cannot be rushed
Drilon said the Senate would work on the measure “as fast as we can,” but could not be rushed to approve it.
“I think the committee on energy chaired by Senator (Sergio) Osmeña will meet on Wednesday next week. Given all the complicated issues, we cannot rush into this but we know the urgency. We will work on this,” he said.
During the hearing on the proposed 2015 budget of the DOE yesterday, Drilon said the President’s letter was too “broad” and did not contain the parameters for the authority being requested from Congress.
Osmeña also echoed Drilon’s statement that the authority could not be granted to the President by the end of the month.
“I’ve been telling them we’ll have a shortage since 2011 and then now this is going to be my fault? It’s not accurate for them to depend on Senate approval before the end of September,” he said.
He said the Senate has a duty to protect the people from the possible adverse impacts of the grant of emergency powers to the President.
He cited the experience during the Ramos administration when several independent power producers were contracted to address the power crisis with a take or pay guarantee. This led to an overcapacity and the National Power Corp. accumulating a massive debt.
Cost to taxpayers
Sen. Francis Escudero said he wants to find out how much the government would incur and its cost to taxpayers.
“What’s the cost to taxpayers of this measure? Even if power contracted by the government will eventually be sold to distributors, and thus the acquisition cost will be recouped, we still would like to know the costs involved,” said Escudero, chairman of the Senate finance committee.
“How will it be financed? Even if it’s an off-budget transaction, the government has the duty to publicly disclose the details,” he added.
Only solution
Energy Secretary Carlos Jericho Petilla said he had raised the issue since July and would continue to push for the establishment of additional generation capacity as “the only solution… at this point.”
While there are other solutions for the expected power shortage next summer, he said there are no guarantees that these would materialize, and might even be more expensive.
Among the options is the Interruptible Load Program (ILP), which involves distribution utilities such as the Manila Electric Co. and electric cooperatives asking their big load customers to address their power requirements by using their own generator sets.
Petilla said private sector response to the ILP has been “dismal” and there is no guarantee it would materialize and address the power shortage.
He said the old Malaya geothermal power plant in Rizal, also among the options, has to be rehabilitated to be utilized.
Given the uncertainties with the other options, Petilla said contracting with power suppliers is presently the only real solution.
Suppliers’ requirement
He said the end-September deadline for the contracting of additional power was based on the requirement of the suppliers of a six-month period to be able to guarantee the necessary load.
“It’s absolute as far as the supplier is concerned,” he said.
With Congress saying that it cannot come out with the joint resolution this month, Petilla said he could settle for a supplier who could provide power requirements of the country in three months.
“But it will be expensive… I don’t think there is anybody who can supply in three months,” he said.
“There are alternatives but the question is, are we willing to pay for it. There are many alternatives, but our problem is time and cost constraints. What we have to consider is if we’re willing to have brownouts. It all depends on what we want,” he added.
Go slow
Militant party-list representatives and other members of the House minority bloc, however, cautioned Congress to go slow in the grant of emergency powers to avoid the anomalies that took place during the Ramos administration.
“We should not commit those mistakes again, like entering into a take-or-pay arrangement, which allows an investor to be fully paid for his generating capacity, whether that is used or not. We should pity the consumer, who will ultimately pay for our mistakes,” Isabela Rep. Rodolfo Albano III, a member of the minority, said.
He said Congress should impose strict parameters for the exercise of emergency powers.
He said Petilla should tell lawmakers his agency’s plans to increase generating capacity in Luzon for the middle of next year.
“Are they buying generators or are they renting? What do they exactly want to do? What are the details? Secretary Petilla should tell us because he will be the one who will be in charge of implementation. As of now, we are groping in the dark, we are guessing. ” he said.
Albano said Petilla should also verify his department’s data on “generating capacity, dependable capacity and demand” to clear up confusion.
“If his own figures for 2013 were to be believed, we even have excess electricity available in Luzon,” he said.
He cited the figures released by his minority colleague, Bayan Muna Rep. Neri Colmenares, and supplied by the DOE, that installed capacity for the Luzon grid is 12,790 megawatts, while dependable capacity is 11,469 MW.
The peak demand for the grid is just 8,700 MW, with Meralco using 6,121 MW.
“If these figures are correct, we will have enough electricity in Luzon next year, when a shortage is projected. Unless they are wrong,” Albano said.
TUCP backs bill
The Trade Union Congress of the Philippines (TUCP) expressed support for the grant of emergency powers for the President, but said he must also ensure that it will not lead to power rate hikes.
“We insist that the Department of Energy now present their tariff simulations and cost-impact scenarios to the public so we will know what to do,” TUCP executive director Luis Corral said.
The TUCP said the DOE’s proposals, such as gas turbines and diesel-powered generation sets, could lead to higher power rates.
“We have already advised DOE to do tariff simulations first because the power crisis cannot just be defined as a lack of power supply, it is also about uncompetitive power rates,” the DOE said in a statement.
“It is the consumers who are being punished for the failure to inspect defective meters in 125 distribution utilities by the ERC. And now the power industry wants to add to their profit by creating a power shortage which will allow them to charge more,” the TUCP statement added.
Doable plans
Militant labor group Partido ng Manggagawa (PM) called on Congress to ask the President to present doable plans to solve the looming power crisis before granting him emergency powers.
PM spokesman Wilson Fortaleza warned that palliative solutions to the power crisis would only bring more problems.
He said the Aquino government should be blamed for the power crisis for doing nothing since warnings were raised as early as 2010.
Fortaleza said lawmakers should also declare the EPIRA and privatization a failure and audit all the plants’ capacities before granting emergency powers to the President. – By Jess Diaz (The Philippine Star) With Mayen Jaymalin, Marvin Sy, Artemio Dumlao
Congress asked to pass extra power reso
PRESIDENT Benigno Aquino III has asked Congress to pass a joint resolution authorizing him to enter into contracts to add generating capacity to the Luzon grid to avert a looming power crisis in 2015.
In a letter to House Speaker Feliciano Belmonte Jr. and Senate President Franklin Drilon dated Sept. 12, Aquino acknowledged that the imminent power shortage during the first quarter of next year as “a real threat to the country’s growing economy and the general welfare of the people.”
Aquino stressed the need for the House and the Senate to move for the speedy enactment of the joint resolution that “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.”
In seeking the authority from Congress, President Aquino invoked Section 71 – the Electric Power Crisis Provision – of Republic Act 9136 or the Electric Power Industry Reform Act (EPIRA).
“This authority is needed to address the imminent shortage of electric power for the summer of 2015 in Luzon,” Aquino said.
Section 71 states that the President, upon determination of an imminent shortage of supply of electricity, may ask Congress for authority, through a joint resolution, to establish additional generating capacity under such terms and conditions as it may approve.
The President’s letter noted that the Department of Energy had projected “a critical electricity situation in the summer of 2015” due to the expected effects of the El Niño phenomenon, the turnaround of the Malampaya gas-to-power facility, the increased and continuing outages of power plants, and the anticipated delays in the commissioning of new power projects.
The resolution to be submitted by the Palace is aimed at averting a looming power crisis in Luzon when the Malampaya gas field shuts down for a month from March 15 to April 15 with a shortfall of at least 300 megawatts.
Belmonte said he already referred the President’s request to the House committee on energy chaired by Oriental Mindoro Rep. Reynaldo Umali.
Umali had earlier vowed “to work very hard” to secure the passage of a resolution that will grant President Benigno Aquino III emergency powers to prevent blackouts next year.
But Senator Sergio Osmeña III, chairman of the Senate committee on energy, said the Palace request would have to be studied very carefully, even as he chided the administration for ignoring his warnings since 2011 of a coming power shortage.
He said Energy Secretary Carlos Jericho Petilla was even going around telling people not to believe him because there would be no blackouts in 2015.
“Now they send us a letter and want action by the end of the month? No sir! I have to protect the Filipino people,” Osmeña said.
“We won’t give him emergency powers just like that. We know what happened in 1992, right?” he added, referring to the negotiated power deals by the Ramos administration that resulted in high energy costs.
“We have to be very careful about what type of powers we will extend to them. Number two, we want to make sure that the people know what the price will be. And I am expecting the price will be as high as P15 per kilowatt-hour, or even 20/kwh.”
Drilon said he received the letter from the President Monday, but also said it would be impossible to have the joint resolution by the end of September.
“That is impossible because we don’t even have the draft joint resolution. We don’t know the parameters of the authority being requested. We know the urgency, but we can’t rush into this. We will work on as fast as we can,” Drilon said.
“I think the Committee on Energy chaired by Senator Osmena will meet on Wednesday next week. Given all the complicated issues, we cannot rush into this but we know the urgency. We will work on this,” he added. “I don’t want to bind Senator Osmeña and his committee. They will examine this.”
Senator Francis Escudero urged the Palace to be transparent about how much contracted energy would cost, and how the Malampaya funds would be used if the President is granted emergency powers.
“A powerful light must shine on these contracts in the interest of transparency and to prevent a repeat of the country’s experience during the energy crunch of 1990s when power contracted later burdened consumers,” Escudero said.
In a speech in Quezon province last week, President Aquino announced he was seeking a joint congressional resolution which would authorize the government to order additional generating capacity of around 600 megawatts.
The generating capacity would be cut into two: 300 megawatts to meet the projected base-load deficit and 300 megawatts as buffer or equivalent to 4 percent of peak demand.
Energy officials forecast an energy shortage in Luzon at 400 MW to 1,000 MW during the first half of 2015.
Leyte Rep. Ferdinand Martin Romualdez, who heads the independent minority bloc in the House, cautioned his colleagues against granting the President emergency powers.
“This is a very serious matter that Congress should address with caution. The concerned government officials should back the necessity of giving emergency powers to the President,” Romualdez said.
The Trade Union Congress of the Philippines-Nagkaisa said it supported the granting of emergency powers, but warned that these should not result in higher electricity costs.
In a letter to House Speaker Feliciano Belmonte Jr. and Senate President Franklin Drilon dated Sept. 12, Aquino acknowledged that the imminent power shortage during the first quarter of next year as “a real threat to the country’s growing economy and the general welfare of the people.”
Aquino stressed the need for the House and the Senate to move for the speedy enactment of the joint resolution that “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.”
In seeking the authority from Congress, President Aquino invoked Section 71 – the Electric Power Crisis Provision – of Republic Act 9136 or the Electric Power Industry Reform Act (EPIRA).
“This authority is needed to address the imminent shortage of electric power for the summer of 2015 in Luzon,” Aquino said.
Section 71 states that the President, upon determination of an imminent shortage of supply of electricity, may ask Congress for authority, through a joint resolution, to establish additional generating capacity under such terms and conditions as it may approve.
The President’s letter noted that the Department of Energy had projected “a critical electricity situation in the summer of 2015” due to the expected effects of the El Niño phenomenon, the turnaround of the Malampaya gas-to-power facility, the increased and continuing outages of power plants, and the anticipated delays in the commissioning of new power projects.
The resolution to be submitted by the Palace is aimed at averting a looming power crisis in Luzon when the Malampaya gas field shuts down for a month from March 15 to April 15 with a shortfall of at least 300 megawatts.
Belmonte said he already referred the President’s request to the House committee on energy chaired by Oriental Mindoro Rep. Reynaldo Umali.
Umali had earlier vowed “to work very hard” to secure the passage of a resolution that will grant President Benigno Aquino III emergency powers to prevent blackouts next year.
But Senator Sergio Osmeña III, chairman of the Senate committee on energy, said the Palace request would have to be studied very carefully, even as he chided the administration for ignoring his warnings since 2011 of a coming power shortage.
He said Energy Secretary Carlos Jericho Petilla was even going around telling people not to believe him because there would be no blackouts in 2015.
“Now they send us a letter and want action by the end of the month? No sir! I have to protect the Filipino people,” Osmeña said.
“We won’t give him emergency powers just like that. We know what happened in 1992, right?” he added, referring to the negotiated power deals by the Ramos administration that resulted in high energy costs.
“We have to be very careful about what type of powers we will extend to them. Number two, we want to make sure that the people know what the price will be. And I am expecting the price will be as high as P15 per kilowatt-hour, or even 20/kwh.”
Drilon said he received the letter from the President Monday, but also said it would be impossible to have the joint resolution by the end of September.
“That is impossible because we don’t even have the draft joint resolution. We don’t know the parameters of the authority being requested. We know the urgency, but we can’t rush into this. We will work on as fast as we can,” Drilon said.
“I think the Committee on Energy chaired by Senator Osmena will meet on Wednesday next week. Given all the complicated issues, we cannot rush into this but we know the urgency. We will work on this,” he added. “I don’t want to bind Senator Osmeña and his committee. They will examine this.”
Senator Francis Escudero urged the Palace to be transparent about how much contracted energy would cost, and how the Malampaya funds would be used if the President is granted emergency powers.
“A powerful light must shine on these contracts in the interest of transparency and to prevent a repeat of the country’s experience during the energy crunch of 1990s when power contracted later burdened consumers,” Escudero said.
In a speech in Quezon province last week, President Aquino announced he was seeking a joint congressional resolution which would authorize the government to order additional generating capacity of around 600 megawatts.
The generating capacity would be cut into two: 300 megawatts to meet the projected base-load deficit and 300 megawatts as buffer or equivalent to 4 percent of peak demand.
Energy officials forecast an energy shortage in Luzon at 400 MW to 1,000 MW during the first half of 2015.
Leyte Rep. Ferdinand Martin Romualdez, who heads the independent minority bloc in the House, cautioned his colleagues against granting the President emergency powers.
“This is a very serious matter that Congress should address with caution. The concerned government officials should back the necessity of giving emergency powers to the President,” Romualdez said.
The Trade Union Congress of the Philippines-Nagkaisa said it supported the granting of emergency powers, but warned that these should not result in higher electricity costs.
“TUCP-Nagkaisa will support the President but the solutions proposed should not punish workers and their families with an increase in power rates. We insist that the Department of Energy now present their tariff simulations and cost-impact scenarios to the public so we will know what to do,” said TUCP Executive Director Luis Corral. – by Maricel Cruz, Joel E. Zurbano, Vito Barcelo - Manila Standard Today
Tuesday, September 16, 2014
With no solution in sight, power crisis will spillover 2016 - TUCP
QUEZON CITY – Without an acceptable and genuine national strategy addressing the forthcoming energy crisis in 2015, the Trade Union Congress of the Philippines (TUCP) is seeing more brownouts to happen in 2016.
TUCP warned that the real extent of the problem will kick in 2016 and beyond if the current Department of Energy (DOE) secretary resort to quick fix and expensive band aid solutions such as renting power barges and generator sets, gas turbines and effect the Interruptible Load Program (ILP) – a program by the DOE allowing malls to run their generator sets with consumers paying for their maintenance and operation costs.
Under these schemes, TUCP insists the generating companies and their distribution utility will merrily do their supply and demand games while continuously burdening consumers with high power rates and more brownouts. The implications for workers who will be laid off, for jobs that will never be created, for imperiled businessmen, and for the poor consumers are disaster.
“We are alarmed at the silence of the government to directly and genuinely address the power crisis. The silence of Secretary Petilla is deafening. After his ‘emergency powers’ call was made, he is now backpedalling and trying to portray the problem as less than it is. Either he is the ‘boy who cried wolf’ or simply trying to place a band-aid fix because he was unable to make a case for surgery to the president, he clearly has not grasped the true extent of the problem,” said TUCP executive director Louie Corral.
Corral warned that the ILP program is just a stopgap measure. He said Meralco customers will now be financially obligated to cover the costs for Messrs. Sy and Gokongwei running their mall generators for their own use on the theory that by freeing Meralco to keep the lights on in other areas that these oligarchs are doing consumers a favor.
“We are going to end up subsidizing their malls. But the 2015 power deficit is just the tip of the iceberg. The failure of both the DOE to address the policy gap now makes it inevitable that the crisis will repeat itself in 2016 and onwards,” Corral emphasized.
The major policy gap is that government does not incentivize the entry of additional and cheaper power capacity if it continues to allow Meralco to enter ‘sweetheart’ bilateral contracts from their preferred suppliers which will always mean low reserves to ensure high power rates.
To bring in genuine competition and additional supply, TUCP is proposing that there is enough leeway in EPIRA for DOE to mandate that henceforth all the distribution utilities such as the market-dominant Meralco, controlling 74%of the Luzon market, to source their power supply every 3 years from international public bidding held under the supervision of the DOE and ERC.
TUCP suspects Meralco is again behind the power crisis. Meralco allegedly hostaged its consumers to their Redondo coal plant supplier in Subic. When the 600 MW coal plant was stymied by the Supreme Court issuance of Writ of Kalikasan and the objections of environmental groups, Meralco could have chosen 2 to 3 years ago to take their supply from AES Masinloc which also wanted to set up 600 MW plant or even from GN Power in Quezon. Instead they insisted on Redondo.
With 74% of the market share in Luzon, Meralco is proverbial ‘only game in town’ and if they chose any other source, this would have prevented the power shortfall for 2015. “Our call is therefore to clip this self-serving option of their subject the choice of who will supply them to international public bidding under DOE supervision,” he added.
- Samar News
TUCP warned that the real extent of the problem will kick in 2016 and beyond if the current Department of Energy (DOE) secretary resort to quick fix and expensive band aid solutions such as renting power barges and generator sets, gas turbines and effect the Interruptible Load Program (ILP) – a program by the DOE allowing malls to run their generator sets with consumers paying for their maintenance and operation costs.
Under these schemes, TUCP insists the generating companies and their distribution utility will merrily do their supply and demand games while continuously burdening consumers with high power rates and more brownouts. The implications for workers who will be laid off, for jobs that will never be created, for imperiled businessmen, and for the poor consumers are disaster.
“We are alarmed at the silence of the government to directly and genuinely address the power crisis. The silence of Secretary Petilla is deafening. After his ‘emergency powers’ call was made, he is now backpedalling and trying to portray the problem as less than it is. Either he is the ‘boy who cried wolf’ or simply trying to place a band-aid fix because he was unable to make a case for surgery to the president, he clearly has not grasped the true extent of the problem,” said TUCP executive director Louie Corral.
Corral warned that the ILP program is just a stopgap measure. He said Meralco customers will now be financially obligated to cover the costs for Messrs. Sy and Gokongwei running their mall generators for their own use on the theory that by freeing Meralco to keep the lights on in other areas that these oligarchs are doing consumers a favor.
“We are going to end up subsidizing their malls. But the 2015 power deficit is just the tip of the iceberg. The failure of both the DOE to address the policy gap now makes it inevitable that the crisis will repeat itself in 2016 and onwards,” Corral emphasized.
The major policy gap is that government does not incentivize the entry of additional and cheaper power capacity if it continues to allow Meralco to enter ‘sweetheart’ bilateral contracts from their preferred suppliers which will always mean low reserves to ensure high power rates.
To bring in genuine competition and additional supply, TUCP is proposing that there is enough leeway in EPIRA for DOE to mandate that henceforth all the distribution utilities such as the market-dominant Meralco, controlling 74%of the Luzon market, to source their power supply every 3 years from international public bidding held under the supervision of the DOE and ERC.
TUCP suspects Meralco is again behind the power crisis. Meralco allegedly hostaged its consumers to their Redondo coal plant supplier in Subic. When the 600 MW coal plant was stymied by the Supreme Court issuance of Writ of Kalikasan and the objections of environmental groups, Meralco could have chosen 2 to 3 years ago to take their supply from AES Masinloc which also wanted to set up 600 MW plant or even from GN Power in Quezon. Instead they insisted on Redondo.
With 74% of the market share in Luzon, Meralco is proverbial ‘only game in town’ and if they chose any other source, this would have prevented the power shortfall for 2015. “Our call is therefore to clip this self-serving option of their subject the choice of who will supply them to international public bidding under DOE supervision,” he added.
- Samar News
Tuesday, September 9, 2014
More brownouts in next 2 years -TUCP
 |
| Energy Secretary Carlos Jericho Petilla said rotational brownouts especially in Luzon may continue in 2015 due to electricity shortage. Photo shows dark Manila streets where power was affected following Typhoon Glenda earlier this year. AP/Aaron Favila |
MANILA, Philippines — Labor group Trade Union Congress of the Philippines on Monday said it foresees more brownouts for the next two years without a concrete national strategy by the government to address a looming energy crisis.
The group said the real extent of the energy problem will kick in 2016 and beyond if Department of Energy (DOE) secretary Jericho Petilla will resort to quick fixes and expensive band-aid solutions.
Such short-term solutions the group cited as ineffective are renting power barges and generator sets, gas turbines and effect the Interruptible Load Program, or ILP.
The ILP by the DOE will allow malls to run their generator sets with consumers paying for their maintenance and operation costs.
Under these schemes, TUCP said the generating companies and their distribution utility will merrily do their supply and demand games while continuously burdening consumers with high power rates and more brownouts.
"The silence of Secretary Petilla is deafening. After his 'emergency powers' call was made, he is now backpedalling and trying to portray the problem as less than it is. Either he is the 'boy who cried wolf' or simply trying to place a band-aid fix because he was unable to make a case for surgery to the president, he clearly has not grasped the true extent of the problem," TUCP executive director Louie Corral said.
Corral warned that the ILP program is just a stopgap measure, noting that Meralco customers will now be financially obligated to cover the costs for mall owners running their generators for their own use.
It runs on the theory that by freeing Meralco to keep the lights on in other areas, businesses are doing consumers a favor, he explained.
"We are going to end up subsidizing their malls. But the 2015 power deficit is just the tip of the iceberg. The failure of both the DOE to address the policy gap now makes it inevitable that the crisis will repeat itself in 2016 and onwards," Corral said.
TUCP said the major policy gap is that government does not incentivize the entry of additional and cheaper power capacity if it continues to allow Meralco to enter 'sweetheart' bilateral contracts from their preferred suppliers which will always mean low reserves to ensure high power rates.
To bring in genuine competition and additional supply, TUCP proposes to allow enough leeway in the Electric Power Industry Reform Act for DOE to mandate all the distribution utilities such as the market-dominant Meralco to source their power supply every three years through international public bidding under the DOE and ERC.
"Our call is therefore to clip this self-serving option of their subject the choice of who will supply them to international public bidding under DOE supervision," Corral said.
By Dennis Carcamo (philstar.com)
Monday, August 18, 2014
TUCP sees gloom for power users
Every household in Luzon may have to pay P1,600 to P1,800 more per month for their electricity once the energy crisis kicks in next year, the Trade Union Congress of the Philippines (TUCP) warned on Sunday.
If this projection holds true, the country’s residential electricity rates would be among the highest in the world, TUCP Executive Director Louie Corral said.
Corral lambasted Energy officials for their alleged lack of concrete and enforceable plans and strategies to avert a power crisis.
“We, and that means all of us, should know the merits and specifics of the recommended strategies, where the suggestions are coming from, and what the taxpayers and the consumers will end up paying for,” he said.
The TUCP and the Philippine Chamber of Commerce and Industry (PCCI) agree that there must be a comprehensive set of policies to combat the crisis while also working to bring power rates down.
Energy Secretary Jericho Petilla earlier admitted that a power crisis may be felt by March or May 2015, affecting 10.4 million households if the projected demand of 9,011 megawatts for next year is not met.
As a solution, Petilla is planning to rent expensive diesel-run power barges for two to three years.
The power barges will be run by the Power Sector Assets and Liabilities Management (PSALM) for 20 days and whenever there will be yellow alert status.
“Under this scheme, the generation charges from these plants, excluding transmission and distribution charges, will easily hit P15 to P18 per kwh. This will dramatically drive up household rates,” explained Alan Tanjusay, TUCP spokesman.
Also proposed was the use of the Interruptible Load Program (ILP), which is being pushed by some business lobbies so that there is no longer any need to resort to emergency powers for President Benigno Aquino 3rd. ILP allows mall owners to run their generators to provide electricity to their stores.
“These groups are now lobbying to bring up the current cost of 66 centavos per kwh, which the ERC [Energy Regulatory Commission[ allows the ILP participating companies to charge to all Meralco customers for running their own generators rather than getting their power from Meralco. Talks are rife that they also want commercial rates in the neighborhood of P15 to P18 per kwh. We remind all that what we face is not just a supply problem but a cost problem. If we are not competitive in Asean we will lose out. Jobs will be lost and no new jobs will be created,” Tanjusay said.
Asean (Association of Southeast Asian Nations) groups the Philippines, Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Singapore, Thailand and Vietnam.
According to Tanjusay, higher electricity “will have a very painful effect on ordinary workers.”
“It will also have dire political consequences for the Aquino administration and derail the economic takeoff of the country,” he also warned. -by JING VILLAMENTE
If this projection holds true, the country’s residential electricity rates would be among the highest in the world, TUCP Executive Director Louie Corral said.
Corral lambasted Energy officials for their alleged lack of concrete and enforceable plans and strategies to avert a power crisis.
“We, and that means all of us, should know the merits and specifics of the recommended strategies, where the suggestions are coming from, and what the taxpayers and the consumers will end up paying for,” he said.
The TUCP and the Philippine Chamber of Commerce and Industry (PCCI) agree that there must be a comprehensive set of policies to combat the crisis while also working to bring power rates down.
Energy Secretary Jericho Petilla earlier admitted that a power crisis may be felt by March or May 2015, affecting 10.4 million households if the projected demand of 9,011 megawatts for next year is not met.
As a solution, Petilla is planning to rent expensive diesel-run power barges for two to three years.
The power barges will be run by the Power Sector Assets and Liabilities Management (PSALM) for 20 days and whenever there will be yellow alert status.
“Under this scheme, the generation charges from these plants, excluding transmission and distribution charges, will easily hit P15 to P18 per kwh. This will dramatically drive up household rates,” explained Alan Tanjusay, TUCP spokesman.
Also proposed was the use of the Interruptible Load Program (ILP), which is being pushed by some business lobbies so that there is no longer any need to resort to emergency powers for President Benigno Aquino 3rd. ILP allows mall owners to run their generators to provide electricity to their stores.
“These groups are now lobbying to bring up the current cost of 66 centavos per kwh, which the ERC [Energy Regulatory Commission[ allows the ILP participating companies to charge to all Meralco customers for running their own generators rather than getting their power from Meralco. Talks are rife that they also want commercial rates in the neighborhood of P15 to P18 per kwh. We remind all that what we face is not just a supply problem but a cost problem. If we are not competitive in Asean we will lose out. Jobs will be lost and no new jobs will be created,” Tanjusay said.
Asean (Association of Southeast Asian Nations) groups the Philippines, Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Singapore, Thailand and Vietnam.
According to Tanjusay, higher electricity “will have a very painful effect on ordinary workers.”
“It will also have dire political consequences for the Aquino administration and derail the economic takeoff of the country,” he also warned. -by JING VILLAMENTE
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