House, Senate differ on who should bear standby power costs

MANILA, Philippines – The legislative debate on President Benigno Aquino III’s emergency powers has boiled down to two sticky issues: should consumers or government shoulder the higher cost of standby power from private owners of generator sets? And, should the special powers be effective for five months or 17 months?

House energy committee chair and Oriental Mindoro Rep. Reynaldo Umali said the Lower House would hold firm on its position that government subsidize the estimated 4-centavo-per-kilowatt-hour hike in power costs implementing the proposed Interruptible Load Program (ILP ) — which pooled the extra power supply of generator sets owned by big corporations — from March to July this year using the Malampaya gas royalty fund.

“This is not the fault of consumers so they should not be made to pay for it. Most importantly, President Aquino himself agrees with the view that the government shoulders it through Malampaya. This shows the government is working for the interest of the people,” said Umali in an interview with DZBB’s Rowena Salvacion .

Umali said his counterpart in the Senate, energy committee chair and Senator Sergio Osmeña III, has insisted on passing the additional cost of power from the ILP to consumers since the increase was not that substantial. “Whether it is big or small, consumers will feel the weight of the increase,” Umali said in reaction.

Umali expected the cost of subsidizing the higher cost of ILP power at P200 million, which could go lower if all power plants would operate at capacity within the timetable.  He said that the government would only pay for the actual power it used from ILP.

Aside from the cost, Umali said that the House and Senate were poles apart on the length of the emergency powers — the House wanted it limited from March to July this year while the Senate wanted it stretched up to July 2016. “Senator Osmeña believes that the power shortage will continue until the new power plants start operations by July next year,” said Umali.

But Umali said that if the bicam agreed to extend the special powers up to July next year, the House would insist that the subsidy would only extend up to July this year so that it would not burden the government.

So why does the President have to get special powers under the Electricity Power Industry Reform Act ( Epira ) if 74 percent of ILP participants in the country have volunteered to provide nearly 1,000 megawatts of power during this year’s summer season? “The pact between the Energy Regulatory Commission and the ILP is based on this joint resolution for emergency powers. This will speed up the process as the ERC will not have to hold hearings and will just follow the law, the joint resolution,” said Umali .

Umali said the bicameral committee would hold its second meeting on Monday (Mar. 9), which he hoped would be the last considering that the crisis period would start in a few weeks.