Noy to Congress: Give me emergency powers

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.

“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

House Ad Hoc panel working full swing to pass Bangsamoro Basic Law

Ad Hoc Comm. on Bangsamoro Chair Rufus Rodriguez conducting its first meeting with the 8 Vice-Chairs and its Secretariat 2014Sep11

While the House plenary conducts marathon sessions zeroing in on the proposed 2015 P2.606-Trillion national budget, Speaker Feliciano Belmonte today declared "We have set the ball rolling in creating this Ad Hoc committee and it's systems go" for the proposed Bangsamoro Basic Law.

Hon. Feliciano Belmonte, Jr."The passage of a Bangsamoro Basic Law is our fundamental role as legislators recognizing and responding to the call of our diverse culture as Filipinos. It is also our contribution to a global quest for genuine and sustainable peace," Belmonte stressed.

Wasting no time, the House Ad Hoc Committee to review, evaluate and proposed legislation relative to the Comprehensive Agreement on the Bangsamoro, chaired by Cagayan de Oro City Rep. Rufus Rodriguez, has approved its Rules of Procedure to guide its deliberations.

"We are tired of war. We cannot afford to lose time. We want peace," Chairman Rodriguez exclaimed after their organizational meeting Tuesday morning, echoing the sentiments of lawmakers especially those from Mindanao.

Gratified by the enthusiasm shown by his colleagues during the initial Ad Hoc meeting, Rodriguez revealed that they agreed to hold open public hearings, starting September 24 until December 17, five days a week, with hearings to be conducted in Zamboanga, Zamboanga Sibugay, Basilan, Sulu, Tawi-Tawi and Marawi, among others.

Hon. Rufus B. Rodriguez"We have decided to give one day for each of these areas to give ample time for concerned people in the said areas to participate actively in the deliberations," Rodriguez added.

The 75-member Ad Hoc Committee represents leaders and members of the majority coalition and five members of the minority group.

During the interim, the committee will be completing the line-up of resource person-invitees or guest who could give valuable insights and proposal to improve or fine-tune the provision in the proposed Bangsamoro Basic Law contained in HB 4994.

HB 4994 is entitled: "An Act providing for the Basic Law for the Bangsamoro and abolishing the Autonomous Region in Muslim Mindanao, repealing for the purpose Republic Act No. 9054, entitled 'An Act to strengthen and expand the Organic Act for the Autonomous Region in Muslim Mindanao,' and Republic Act No. 6743, entitled 'An Act providing for the Organic Act for the Autonomous Region in Muslim Mindanao,' and for other purposes."

It is interesting to note that the authors of the proposed law consists of the leaders of the Majority coalition led by Speaker Belmonte, among them are: Deputy Speakers Henedina Abad, Giorgidi Aggabao, Sergio Apostol, Pangalian Balindong, Carlos Padilla and Roberto Puno; with Majority Leader Neptali Gonzales II; and Reps. Mel Senen Sarmiento; Enrique Cojuangco; Mark Llandro Mendoza; Eleandro Jesus Madrona; Elpidio Barzaga, Jr.; Antonio Lagdameo, Jr.; Rolando Andaya, Jr.; Nicanor Briones; and Raymond Democrito Mendoza.

Recalling recent events, the Comprehensive Agreement on the Bangsamoro (CAB), signed on March 27, 2014, signalled the end of the decades-long armed conflict in Mindanao that has posed major setbacks to the full progress and development of the country, Belmonte and his co-authors pointed out.

"The negotiated CAB outlines the mechanisms, processes, and modalities through which the parties aim to establish and entrench a regime of peace, development, social justice, and the rule of law in the conflict-ridden areas and communities in Southern Philippines," the authors stressed.

Furthermore, inspired by the constitutional foundation on autonomous regions under the 1987 Constitution, the CAB prescribes the design for a new political entity to build upon the vital reforms introduced by the current government of the Autonomous Region in Muslim Mindanao (ARMM), they added.

"The proposed Bangsamoro entity will enhance existing systems and procedures, as well as establish a new set of institutional arrangements and modalities between the central government and the autonomous government with respect to power-sharing, wealth- and revenue-sharing, transitional aspects, and normalization," Belmonte assured.

Chairman Rodriguez said that, among other important considerations, his committee is will never compromise on the issue of constitutionality of all the provisions embodied in the proposed Basic law.

"We will make sure that it will be a win-win framework for all Filipinos," Rodriguez stressed. - by Dionisio P. Tubianosa, Media Relations Service-PRIB

TUCP calls for ERC, Napocor revamp

MANILA, Philippines - Labor group Trade Union Congress of the Philippines (TUCP)- Nagkaisa on Tuesday expressed support for the granting of emergency powers to President Benigno Aquino III to address the power crisis.

The group's support entails the condition that the proposed solution will not drive up electricity rates and that there be a revamp of both the Power Sector Assets and Liabilities Management Corporation (PSALM) and the Energy Regulatory Commission (ERC).

“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 (DOE) now present their tariff simulations and cost-impact scenarios to the public so we will know what to do,” TUCP executive director Luis Corral.

TUCP-Nagkaisa accused PSALM of criminal negligence for not including in its budget for operations the pending case of the illegally terminated workers of the National Power Corporation.

The recent Commission on Audit report on both the financial and operational audit of the ERC showed it has failed to inspect 125 distribution utilities as to possible metering violations, allowing an overcharging of the bills of millions of customers.

“We will no longer tolerate the intellectual dishonesty and corruption in the DOE, the ERC and PSALM. Workers and their families will no longer be the whipping boys to increase the corporate profits of the power industry up. Workers need also their fair share now,” Corral said.

He noted that while it is difficult to obtain a wage adjustment in Congress and the regional wage boards, it is so easy for the power sector to obtain an increase in their power rates before the ERC.

“The ERC even allows Meralco (Manila Electric Company) to charge its customers for future expenditures and projected operational costs, three years into the future. In effect, the consumer is made to advance for the capital expenditures of Meralco," Corral said.

The TUCP-Nagkaisa decried the failure of the PSALM to factor in the case of the illegally terminated NPC employees.

“Under their Operational Management Agreement, PSALM is in charge of maintaining the assets to answer for the stranded costs of NPC. The biggest elephant in the room was the pending Supreme Court case involving the workers of the NPC. It was the biggest item that would have to be paid,” TUCP-Nagkaisa spokesperson Alan Tanjusay said.

He said the TUCP-Nagkaisa expressed alarm that some of the solutions listed by the DOE are gas turbines and diesel-powered generation sets.

“This will drive the power rates up. 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. Ordinary workers and their families are the ones being punished by for the lack of forwards planning of DOE,” Tanjusay said. - By Dennis Carcamo (philstar.com)