House stands firm on no pass-on provision in emergency power resolution

MANILA, Philippines — The House of Representatives will insist on not passing to consumers the cost of implementing President Aquino’s emergency powers aimed at preventing power shortage this coming summer, the energy panel chair said Tuesday.

In a press conference, Oriental Mindoro Representative Reynaldo Umali said consumers stand to lose if the chamber gives in to a Senate proposal which seeks to pass on to them the cost of subsidies given to businesses under the proposed Interruptible Load Program (ILP).

The pass on provision is one of two items which panels from the House of Representatives and the Senate sitting as a bicameral committee are in disagreement.

While the House wants to source the subsidies from the Malampaya fund, the Senate wishes to charge consumers for the implementation of the ILP, which is hoped to address the looming power crisis this year.

How long?

The other sticky issue is the duration of the emergency powers.

The lower chamber wants the period only from March to July this year, while Senate wants it to run until July 2016.

“It’s already a stalemate,” Umali said when asked to describe the bicameral conference, which seeks to consolidate the House and Senate versions of the resolution.

“We have to think of the people. This is why we’re standing firm,” he said, explaining the House’s stand against the pass-on provision.

Under the proposed ILP, businesses would be tasked to use their own generators during peak hours to offset demand. But since electricity produced by generators would cost more than that sourced from power utilities, the government would have to pay for the difference.

Senator Serge Osmeña , who chairs the Senate energy panel, said passing on to consumers the cost of the program would make them use energy wisely, estimating that the cost may be at P4 centavos per kilowatt hour.

‘Heavy burden’

But Umali said a one-centavo increase in Luzon would amount to a P700-million cost to the economy that would directly affect consumers.

“Napakabigat for every one centavo increase. Kung nag-piso pa ito, lalo na (A one centavo increase is quite heavy, worse if it goes up to one peso),” Umali said.

Asked if he was seeing Osmeña , who has long questioned the need for emergency powers, as a stumbling block to reaching an agreement, Umali said: “I’m a hopeless optimist. I have to hear what they have to say.”

In an earlier interview, Umali advised Osmeña not to give sermons to consumers and instead find ways to resolve the power crisis.

Under the emergency powers, other proposed solutions besides the ILP are the fast tracking of committed projects and plants for interconnection and rehabilitation.

The resolution stemmed from the request of the energy department to grant the president emergency powers for additional capacity to address the looming thinning power supply in Luzon this summer.

Granting presidential emergency powers is mandated under the Electric Power Industry Reform Act.

The summer power shortage is attributed to the looming El Niño phenomenon, the maintenance shutdown of the Malampaya power plan, increased or continuing outages of power plants, and the delay in commissioning of committed power projects.