Noy emergency powers to be OK’d this month

MANILA, Philippines - Congress is targeting to grant President Aquino emergency powers by the third or fourth week of this month to address next year’s power woes, the chairman of the House committee on energy said yesterday.

Oriental Mindoro Rep. Reynaldo Umali said this would give the Department of Energy (DOE) time to provide the guidelines for the so-called Interruptible Load Program (ILP).

“We are giving a deadline to prospective ILP participants to register by Dec. 1. To give time for the DOE to issue implementing rules, we need to pass it well ahead of time, maybe by third or fourth week of November,” Umali said.

The ILP option, wherein big power users will be asked to use their own generators to ease demand from the grid, is the primary measure Congress is eyeing to provide additional power capacity for the summer of 2015.

Umali said the option to lease new generator sets as proposed by Energy Secretary Carlos Jericho Petilla would cost the government P6 billion, which is why lawmakers are lukewarm to the proposal.

Congress is in recess and will resume session on Nov. 17.

The cost of compensating big electricity users for power they will provide under the ILP is estimated at P80 million. The amount is lower than the earlier estimates made by power distributor Manila Electric Co. (Meralco) at P200 million for ILP compensation.

Under ILP rules, compensation for ILP participants will be charged to consumers but may be subsidized by the government if Congress grants Aquino emergency powers to address next year’s power woes.

With the amount for ILP compensation lower than the cost of leasing generator sets, Umali said he is expecting less resistance from Congress, the business sector and power consumers to moves granting the President emergency powers.

“This is a Solomonic solution to the problem we are facing. We are going to stave off debilitating blackouts without burdening the consumers with high power cost,” Umali said, adding the emergency powers will also allow suspension of required permits for additional generating capacity that can be available by March 2015.

With such savings, Umali expects all stakeholders to support the measure.

“The ILP will drastically cut government costs to augment the power shortage next year to only about P80 million, against the previously estimated P6 billion per 300-megawatt lease of generators,” Umali said.

However, the lawmaker said the success of the ILP program rests on Aquino’s getting special powers to immediately decree a law that will give tax breaks and other financial incentives to big power users enrolling under the ILP.

DOE or NGCP projections?

Meanwhile, the DOE and the National Grid Corp. of the Philippines (NGCP) continue to disagree on their projections of power shortage in Luzon next summer during a hearing at the House of Representatives.

Petilla attended the meeting of the technical working group (TWG) of the energy committee where he insisted on the DOE projections that shortfall was anywhere from 300 megawatts to as high as 1,800 MW.

The committee has been holding meetings of the TWG as well as public hearings on the proposed joint resolution granting emergency powers to the President to address the expected shortfall in 2015.

Petilla said the projections were based on Luzon’s experience in the summer of 2014, even as he cited new commitments of power supply that came in after July or when the public raised the need to grant Aquino emergency powers to allow him to contract additional generating capacity.

“I’d like to point out that we’re scraping the bottom of the barrel (of powers sources),” Petilla told the TWG meeting.

It was clear, however, to all those present that the shortage being referred to are for reserve power capacity. The DOE said while there is technically sufficient power this summer – when demand surges – the issue on reserves is crucial as plants are prone to breakdowns during the period while others are scheduled for maintenance shutdown.

Umali, however, pointed out that the NGCP, which operates the power grid, projected a much lower or even sufficient reserves.

The NGCP used the same data as the DOE but it did not include the projected forced outages brought about by maintenance shutdowns in its forecasts.

The NGCP said the forced outages can be taken care of by the 647 MW contingency reserves.

The lawmaker pointed out the DOE has yet to include the reduced demand for power under the ILP where large commercial and industrial establishments disconnect from the grid and use their own generators, as well as other energy-saving measures.

“When you look at the NGCP figures, everything looks rosy but outages are a fact of life,” Petilla responded as he pointed out that forced outages in the country totaled over 300 MW.

“Contingency reserves (647 MW) will not guarantee (power) so what we must have is dispatchable power,” he said, adding the panel should choose between the projections of the DOE or the NGCP. – With Paolo Romero