Senator Francis Escudero INQUIRER FILE PHOTO
Sen. Francis “Chiz” Escudero on Sunday cautioned against offering President Aquino emergency powers, including taking over generation plants to avert a power crisis, saying this could scare off potential investors in the power sector.
Besides, when Congress granted emergency powers to then President Fidel V. Ramos two decades ago, it led to high power costs, Escudero said.
“While I’m an ally and a friend of the President, Congress should not be volunteering such powers. Neither the energy secretary nor the President is even asking for it,” Escudero, who chairs the Senate finance committee, said in an interview over radio dzBB.
“It’s just not right to be offering such powers,” he added.
In the House of Representatives, several congressmen thumbed down a proposal by one of their own to grant Aquino emergency powers to deal with what they called a “veiled threat” from Manila Electric
Co. (Meralco) of outages due to its stalled collection of P4.15-per-kilowatt-hour (kWh) rate increase.
Oriental Mindoro Rep. Rey Umali, chair of the House energy committee, said the call for emergency powers was an overreaction and unnecessary.
“There is no power crisis and the administration can handle the situation without having extraordinary powers,” Umali said.
Evardone proposal
Eastern Samar Rep. Ben Evardone proposed that Congress consider granting the President limited powers so he could fast-track the construction of more power plants.
With such emergency powers, the President could deal with the rising cost of electricity and deterioration of mass transport facilities, said Evardone, an administration ally.
More power plants could meet the growing demand for electricity and bring down costs, he argued.
If at all, the powers would authorize the President to shorten the bidding process and simplify the “Swiss challenge mode of inviting investors into the power and transport sectors,” Evardone said.
Speaker Feliciano Belmonte said the proposal had so far failed to generate any support from House members. “I won’t move unless the President officially requests. Even then, we need to study the pros and cons,” Belmonte said in a text message.
Cavite Rep. Elpidio Barzaga said all systems were in place to address the present problems. “The arbitrary exercise of emergency powers will not do good for the country and would only discourage business investors to the country,” he said.
Bluffing
Barzaga reckoned that Meralco was just bluffing when it warned that the temporary restraining order issued by the Supreme Court on its rate hike had impaired its ability to sustain its power supply purchases. “I do not think Meralco’s threats are real,” he said.
Meralco earlier said it had been receiving demand letters to pay at least P9.6 billion it had incurred from buying power on the spot market following a shutdown of the Malampaya gas pipeline and some power producers between November and December last year.
The Supreme Court temporarily restrained Meralco from collecting the P4.15 increase from its 5.3 million customers in late December.
ACT Teachers Rep. Antonio Tinio said Meralco’s warning was a cunning ploy to subvert legal efforts to stop the collection of unwarranted profits arising from collusion of power generation firms.
Mum on proposal
Malacañang was mum about Evardone’s proposal.
Communications Secretary Herminio Coloma said the President had not tackled the matter with the members of his Cabinet.
But the Palace noted that “it is important for the players in the power industry to act in a manner consistent with the public welfare as their business is imbued with public interest.”
“It is important for the industry to cooperate with the government because their business involves public service,” Coloma said in Filipino over state-run Radyo ng Bayan.
He said Aquino’s instruction was for his Cabinet to “continue studying and looking for concrete ways to cushion the impact of last month’s big increase in the price of electricity, which was temporarily stopped by the Supreme Court.”
Asked about this possibility of rotating brownouts, Coloma said, “It’s the government’s responsibility to take care of the welfare of the people.”
Instead of offering emergency powers to the President, Escudero said Congress should wait for the Chief Executive to ask for such powers.
After all, such powers were part of the delegated authority of Congress and granting these was a diminution on the part of the legislature, he added.
If in their view they needed such powers, the President or the energy secretary should submit a proposal to Congress, Escudero said.
“It would be good to see what they will propose. Will they ask for power to take over power producers or set a price cap? We don’t know what kind of emergency powers they will ask,” he said.
If Congress grants such powers ahead of any request from the executive department, it risked the possibility of being vetoed by the President, the senator said.
Unnecessary
Escudero said it was unnecessary for the government to take over power plants because the National Power Corp. had the capacity to still generate additional power.
“There are still plants owned by the government that could supply power. There’s no need to take over the private power plants … If at all, only the government can lose if they sell at a lower price,” he said.
Authorizing the government to take over plants would prompt investors to withdraw, the senator said.
“So that in 2014 and 2015, we will not only face an artificial power crisis but also a real power crisis because nobody invested in additional generating capacity,” he said.
Escudero said an energy crisis would happen if the independent power producers (IPPs) stopped selling power on the spot market.
“And the mere fact that the executive [department] isn’t asking for such powers means they don’t need them yet,” he said.
High power costs
Besides, when Congress granted emergency powers to Ramos to deal with the widespread blackouts in 1993, this resulted in high power costs, the senator noted.
Wielding these powers, Ramos issued licenses to independent power producers to construct power plants within 24 months. To lure investors, he approved supply contracts that guaranteed government purchase of the power produced by the IPPs.
But the arrangement became a problem during the East Asian financial crisis of 1997 when demand for electricity declined and the peso lost half of its value.
“This resulted in high electricity costs. Since then, I’ve been saying we should be careful in granting emergency powers. Yes, we had electricity but we had one of the highest rates in the world,” Escudero said.
“If we are to resort to such powers again, we should make sure we avoid a repeat of what happened in the past,” he added.
Escudero said he believed that Meralco wasn’t threatening when it said that further constraints on its capacity to collect the P4.15 per kWh adjustment in its generation charge could disrupt the entire power industry.
“Meralco was probably telling the truth. If they don’t pay the proper charges, they face the risk of not being supplied power,” he said. “At the end of the day, some plants will still sell because they will still earn profits.”
Epira repeal
Sen. Vicente Sotto III, however, viewed Meralco’s warning of a blackout as a “veiled threat.”
He said he would a file bill seeking the repeal of the Electric Power Industry Reform Act (Epira) of 2001.
“We should repeal the Epira law. The government must have control over the power sector,” Sotto said in a text message. “The government reacts to the people’s plight. Businessmen do not.”
Bayan Muna Rep. Neri Colmenares, a senior deputy minority leader, said the call for emergency powers was part of “an evil agenda.”
“Truth is there is no emergency situation. Meralco and the IPPs colluded to create artificial power shortages through simultaneous power plant shutdowns. The real problem is the greed for profits of these power generators and suppliers,” Colmenares said.
Instead of emergency powers, what the President needs are “political will, competence and genuine empathy for our suffering people,” the party-list lawmaker said.—With a report from Christian V. Esguerra
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