House rushes to grant P-Noy emergency powers

MANILA, Philippines - The House of Representatives will rush the approval before the end of the month of the proposed joint resolution granting President Aquino emergency powers to deal with a power crisis in Luzon next summer, Speaker Feliciano Belmonte Jr. disclosed yesterday.

Belmonte said the House committee on energy, chaired by Oriental Mindoro Rep. Reynaldo Umali, has held several meetings of the technical working group in the past weeks to pave the way for a full public hearing when Congress resumes session on Oct. 20.

“The approval will be done as soon as we reconvene. We must avoid even occasional and short duration brownouts,” Belmonte said in a text message.

Umali said the panel aims to approve the measure before Congress goes on another break on Oct. 31. Aquino earlier asked Congress to rush the resolution, saying lawmakers will be blamed if blackouts hit Luzon.

Belmonte said the resolution might specify a combination of options that Aquino may implement other than just negotiating for the lease of expensive power barges estimated to cost up to P12 billion.

“We want to rely more on the ILP but we are amenable to limited resort to other options,” Belmonte said, referring to the Interruptible Load Program (ILP).

The ILP is a voluntary scheme where large commercial establishments are cut off from the grid and use their own “embedded power” or generators, with the government compensating them for the fuel used.

According to the draft resolution submitted by Energy Secretary Jericho Petilla to the Senate and the House last Oct. 7, Aquino has sought authorization from Congress “to establish additional generating capacity pursuant to Section 71 of Republic Act 9136 or the Electric Power Industry Reform Act (EPIRA) of 2001” to be valid until July 31 next year.

The EPIRA bars the government from engaging in power generation. The authorization would allow the generation of an additional 200 megawatts to 500 MW of power, according to the draft.

The resolution listed options for the government to take to address the power gap, such as entering into bilateral contracts with independent power producers and/or committed new capacities of merchant power plants to be introduced in the Wholesale Electricity Spot Market (WESM) to be available on or before March 1, 2015;

Renting additional generation capacity by the Power Sector Assets and Liabilities Management Corp. (PSALM) or any other government agency in coordination with the Department of Energy (DOE);

Purchasing additional generation capacity by the PSALM or other government agencies on or before March 1, 2015 and after July 31, 2015; and the ILP where the PSALM or any government agency may purchase from self-generating facilities or backup generators, where the owners will receive reimbursement for fuel expenses and reasonable recovery for the use as may be determined and validated by the DOE.

Umali welcomed the fact that the draft resolution of the DOE was now detailed but asked why the authority sought was until July when the projected shortage was only until May.

Bayan Muna party-list Rep. Neri Colmenares, however, said there is still no concrete and convincing evidence that indeed there will be a power shortage in summer.

He expressed suspicions that the emergency powers were being asked to justify the negotiating of onerous contracts that would line the pockets of some officials in government and the private sector.

The lawmaker said the authority would allow Aquino to skip many checks and balances.

Malampaya Fund

Senate President Pro-Tempore Ralph Recto said Congress leaders are looking into putting a clause into the proposed special powers that will allow President Aquino to use the Malampaya Fund to help cushion the impact of the power crisis on consumers.

“The reason for Malampaya to begin with is for exploration, but nothing prevents Congress from passing a law that will say that it can be used for a particular purpose. Nothing can prevent us from doing that,” Recto said.

Recto noted that there are roughly P25 billion to P30 billion representing royalties from Malampaya operations this year.

The Malampaya funds, which reached as much as P130 billion through the years, have dwindled to about P30 billion, the senator added.

“But there is an amount of money that remains there, that was collected this year, which can be used for emergency powers. I am open to it,” he added.

The authority to tap the Malampaya funds is among the conditions under the emergency powers, Recto said.

To prevent possible abuse or misuse of the Malampaya Fund, Recto said Congress would provide a limited timeframe for special powers for the President, maybe until June.

Recto admitted that he is inclined to support the giving of special powers to Aquino to avoid any massive blackouts next year.

The proposed emergency powers for Aquino should not cost consumers in terms of higher rates, Isabela Rep. Rodolfo Albano III said yesterday.

“Filipinos are already suffering from one of the most expensive electricity rates in Asia and the entire world. They should not be the ones to suffer because of the incompetence and lack of foresight and strategic planning of energy and other government officials,” he said.

He said if Aquino would opt for buying or renting diesel generators from foreign suppliers, Congress should allow him to draw the needed amount from the Malampaya Fund.

“At least, this would not directly burden electricity users,” he added.

Albano, who belongs to the House minority bloc, suggested that leasing or buying generators should be the last option to solve the projected electricity shortage for the March-June period next year.

He pointed out that energy officials have themselves committed that this would be the last option, since they have other solutions like tapping standby generating capacity from malls and big commercial establishments, including factories.

Quoting an official of the Energy Regulatory Commission, he said these establishments have about 3,000 MW in standby capacity.

“If we can tap just a third of that, or 1,000 MW, that is more than enough to fill the expected shortage, which is forecast to be between 300 MW to 600 MW,” he said.

He said if Aquino would resort to bringing in generators from abroad and using the Malampaya Fund, he should make sure that this would comply with the recent Supreme Court decision limiting the use of such fund to “energy-related projects.”

“The President should also make sure that the procurement process is above board and transparent, and there are no commissions or kickbacks to be paid. There is a lot of public money involved here – up to P12 billion,” he said.

Albano earlier expressed doubt on the claim of Petilla that there would be an electricity shortage next year.

He said a report submitted by the National Grid Corp. of the Philippines to the House energy committee shows that supply for the whole of 2015 would not only be sufficient but even have a reserve. – With Jess Diaz