‘Petilla’s offer to resign should trigger reforms in energy sector’

MANILA, Philippines - Energy Secretary Jericho Petilla’s resignation offer for failing to fully restore power in areas destroyed by Super Typhoon Yolanda should trigger radical reforms in the energy sector, Gabriela party-list Rep. Emmerenciana de Jesus said yesterday.

De Jesus said Petilla’s “broken promises to restore Leyte power lines should provide the momentum to solve the Philippines’ power problems with radical structural policies and to fix Aquino’s incompetent handling of the energy crisis.”

“Petilla quitting the DOE (Department of Energy) exposes the bankrupt policy environment no matter how many experts are deployed to implement Republic Act 9136, the Electric Power Industry Reform Act or EPIRA,” the lawmaker said in a statement.

De Jesus said resigning does not absolve Petilla of culpability in the “recent electricity rate killer hikes,” adding that he needs to face investigation by Congress.

She said repealing the EPIRA is more decisive in reforming the energy sector as the law surrendered the power industry to the private sector.

“They (industry players) are reluctant to repair damaged power infrastructure in Leyte because this is considered a cost center, and takes away from the mega profits of independent power producers, the transmission company and retail distributors,” De Jesus said.

She also pushed for the repeal of the Oil Deregulation Law and the value added taxes on oil products to reverse the huge increases on fuel.

“The Philippines should really enact a massive nationalist takeover and investments in the energy sector, and eliminate dependence on foreign private investors who siphon off huge profits from our patrimony assets such as the Malampaya gas field,” she said.

Repeal EPIRA

Meanwhile, Neri Colmenares of Bayan Muna, Luz Ilagan and De Jesus of Gabriela, Antonio Tinio of Alliance of Concerned Teachers, Terry Ridon of Kabataan and Fernando Hicap of Anakpawis filed a bill seeking the repeal of the EPIRA.

“They said EPIRA was supposed to deliver a quality, reliable, secure, and affordable supply of electricity. But the exact opposite happened. For the past 12 years that EPIRA had been in effect, electric power consumers and businesses throughout the country endured high power rates. Without any public hearings or consultations, automatic monthly adjustments in power rates were imposed,” the lawmakers said.

They said the Energy Regulatory Commission authorized the Manila Electric Co., the National Power Corp. (Napocor), National Grid Corp. of the Philippines (NGCP), National Transmission Co. and independent power producers to automatically pass on to customers certain increases without any public hearing or consultation.

They pointed out that instead of bringing down the cost of electricity, the law has doubled it, making the country’s power rates one of the highest in the region.

“In 2012, power consumers paid an average of P9.14 per kilowatt hour (kwh) per month,” they said.

Colmenares and his colleagues said EPIRA has also not achieved its goal of wiping out the indebtedness of the state-owned Napocor.

“In 2001, Napocor’s debts stood at $16.39 billion or some P834.29 billion. The Public Sector Assets and Liabilities Management (PSALM) paid $18 billion to settle the obligations of Napocor from 2001 to 2010. Of the amount, $6.7 billion went to principal amortization, $4.3 billion for interest payments, and $7 billion for obligations to independent power producers (IPPs),“ they said.

“But after more than a decade of paying billions, EPIRA failed to trim Napocor’s debts. By November 2011, Napocor’s debts remained at a staggering $16.63 billion, higher than the $16.39 billion when EPIRA was passed,” they said.

PSALM is the state corporation created by the law to sell Napocor’s assets and pay off its creditors. PSALM itself is now mired in debt.

The six lawmakers said the law has only fattened the bank accounts of private investors at the expense of consumers.

Proof of this is that Meralco’s annual profits have jumped from single digit to P15 billion in 2011, increasing further to P16.3 billion in 2012, they said.

They said NGCP, which operates Napocor’s transmission facilities and which is partly owned by a Chinese state corporation, is assured of an annual profit of at least P20 billion.

Hydrogen as alternative fuel

As this developed, Sen. Ferdinand Marcos Jr. reiterated his call for the immediate approval of his bill seeking to develop hydrogen as an alternative power source.

Senate Bill 408 entitled “The Hydrogen Research, Promotion and Development Act of 2013” seeks to create a Philippine Hydrogen Research and Development Center to spearhead the development of hydrogen.

Marcos said the instability of world oil prices, which are dictated by the Organization of Petroleum Exporting Countries (OPEC), is retarding the country’s efforts for rapid economic growth, considering that it is highly dependent on oil imports.

“The latest big time price increases of both petroleum products and electricity in the last few weeks, with price adjustments of power until the first few months of next year is expected, there is compelling need to shift to hydrogen as an alternative fuel as a long term-solution,” he said.

Under the bill, the hydrogen center to be created and operated by the Department of Science and Technology, will handle the research, development and utilization of hydrogen in the country; initiate and encourage inventions of machineries, equipment, vehicle and the like to be powered by hydrogen, and serve as the core network of foreign investments on the development and utilization of hydrogen, among others. – With Jess Diaz, Christina Mendez