Bill grants Aquino emergency powers to solve Mindanao energy crisis

MANILA, Philippines—A bill granting emergency powers to President Benigno Aquino III to address the energy shortage in Mindanao has been filed in the Senate.

Senate Bill No. 3167 known as the “Electric Power Crisis Act of 2012” was filed Wednesday by Senator Antonio “Sonny” Trillanes IV.

Under the proposed legislation, the President may enter into negotiated contracts for the construction, rehabilitation, improvement or maintenance of power plants, projects, and facilities.

“Out of abundance of caution, however, this measure expressly prohibits the government from granting sovereign guarantee for the payment of obligations incurred by the independent power producers (IPPs),” Trillanes said in a statement on Thursday.

The bill also prohibits the government from entering into negotiated contracts which “will bring the total production capacity in excess of the power requirements of the country” as projected by the Department of Energy.

“Provided finally that no take-or-pay contracts or similar onerous provision shall be entered into in the exercise of the powers provided in this Act,” the bill said.

Trillanes pointed out that the take-or-pay or similar provision appeared to have been abused in the past.

The bill also authorized the President to fix the rate of return base of IPPs to a certain percentage of the rate base as may be determined by Malacañang in consultation with IPPs and other stakeholders.

“Provided that said rate of return on rate base shall not exceed 12 percent per annum,” said the bill.

“Any increase in power rates shall take effect only upon approval of the Energy Regulatory Commission and only after proper notice, hearing and due proceedings,” it further said.

The authority granted to the President, under the bill, will be valid and effective for a period of one year.

“Unless sooner or withdrawn by a resolution of Congress, without prejudice to rights and benefits that may have been vested, and culpabilities and liabilities that may have been incurred,” the bill added.