MANILA, Philippines–Malacañang should not expect a swift approval of its request for a joint resolution authorizing President Aquino to establish additional power generating capacity, at least not by the end of September as the administration would like, according to Senators Franklin Drilon and Sergio Osmeña III.
Drilon on Monday received the letter from Malacañang requesting the joint resolution, but he said it was “broadly worded” and did not even attach a draft of the measure sought to be approved.
Because of this, the Senate does not even know pertinent details, such as the limits of the authority being asked for, said Drilon.
Drilon said the Senate was unlikely to approve this by the end of September, which Energy Secretary Jericho Petilla said was the deadline for contracting additional power capacity that he hoped to meet. Some
P6 billion to be taken from the Malampaya Fund was needed for about 300 megawatts.
“On the timetable, it is impossible to have it by the end of September. That is impossible because we don’t even have the draft joint resolution. We don’t know the parameters of the authority being requested. We know the urgency, but we can’t rush into this,” Drilon told reporters.
He said the Senate would work as fast as it could but it was unlikely to finish reviewing the request by the end of the month because the committee on energy would need to hold a hearing, plus Congress was set to go on a three-week break the week after next.
“Given all the complicated issues, we cannot rush into this but we know the urgency. We will work on this,” he added.
October target
In the House of Representatives, the chair of the energy committee said he hoped the panel would be able to finish deliberations on the resolution by October “at the latest” in spite of ongoing plenary debates on the 2015 budget as well as two periods of congressional recess in the next few weeks.
Oriental Mindoro Rep. Reynaldo Umali said the committee would ask Petilla to “define what should be our basis for the issuance of a joint resolution” authorizing Aquino to acquire additional generating capacity.
“We would like to request the DOE (Department of Energy) for clear parameters that we need to consider in crafting the resolution… It must be established there is an imminent power crisis,” Umali told a press conference.
He said there was also a need to define the terms and conditions for the grant of emergency powers, pursuant to Section 71 of the Electric Power Industry Reform Act (Epira), the law cited by Aquino in his request.
But the lawmaker said the committee would treat the request “with an open mind.”
“We need to do our homework. In doing our homework we need to first consider the welfare of the people, and second, to make sure that whatever emergency powers we will grant, our President will not be embarrassed,” Umali said.
“We will try to get the consensus of the Lower House,” he said.
‘We won’t just give power’
Drilon and Osmeña, the energy committee chair, said the Senate would need more details, such as the assumptions on the performance of the existing plants that are set to be rehabilitated, like the Malaya power plant.
Osmeña said he planned to schedule the first hearing on the Palace’s request by next week. But he did not want to be pressured into approving this posthaste, as he noted that he had long warned of a power crisis, but had been ignored.
“So now, the President sat on this for one-and-a-half months and sent a letter yesterday (Monday), and he wants this by the end of the month? No sir! I have to protect the Filipino people. We would not just give power, emergency powers. We all know what happened in 1992, don’t we?” he said.
This was why there was a need to be careful about what type of power would be granted, he said, adding that he wanted to make sure people would know what the power rate would be.
Tap other sources
Osmeña also said there was a need to look into tapping other sources of capacity, such as the interruptible load program (ILP) where businesses can get paid for using their own generating facilities, thus freeing up distribution utilities to serve other customers.
There is also a need to manage the demand side, which means teaching people to conserve electricity, he added.
Petilla, who appeared in the Senate to defend his department’s proposed budget, told the senators that since a lead time of five months was needed to procure the additional generating capacity, the administration was looking at the approval of the resolution by the end of September.
The P6 billion is the cost of renting capacity for two years, the minimum period allowed by rental companies, Petilla said.
Modular gen sets
According to him, he was hoping for the approval of the resolution by the end of the month because that was his deadline to contract. He said officials are looking to renting an existing working plant or purchasing modular generator sets, bigger ones that are plug-and-play.
He also said officials had tapped a supplier in Australia, but the latter could not hold on to the stock for too long and wait for the Philippines to decide to get these, because there was also a demand for these from other countries.
Petilla also told reporters that the authority to establish additional generating capacity was the only “real solution” he could see at this point.
He said the other solutions being touted could not be relied on as of now. There have been few takers for the ILP, while the rehabilitation of the Malaya plant by summer of 2015 was also not a sure thing.
“We’re betting so much on certain things that are uncertain. The only thing certain is if the government actually procures at this point,” Petilla said.
Asked what he would do if Congress would be delayed in approving the joint resolution, he said he would still “go to the last corner of the world and look for anybody who can actually supply what we need.”
A delayed approval is still better than nothing, and the last thing he should do is give up, otherwise people will suffer, he added.
In case the joint resolution would not be approved, Petilla said he would work on what he has, and ILP was the most feasible.
4 options
In the House, Umali said the committee on energy was looking at four options to augment the depleted power supply.
These are the ILP, similar to a scheme in Mindanao that gives incentives to establishments to generate their own power and save energy, an “energy efficiency and conservation” program, the use of the natural gas-fired Avion power plant and contracting the leasing capacity “from outside.”
The fourth one would serve as the “last resort,” in which government would have to spend at least P6 billion over a two-year contract at a rate of P1 billion per 100 MW.
“So if the requirement is 300 MW, then it should cost about P6 billion” over two years, Umali said, explaining that the contractor would not accept any contract less than two years because of the infrastructure the operation would involve.
Umali said the last option would have to be mobilized within four months. “In the case of Fukushima, when the nuclear power plants [had a meltdown after the March 2011 tsunami disaster] the contractor was able to mobilize within 70 days.”
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