No way to go but to amend EPIRA, says reader

In the last column, we featured some short-term remedies as suggested by Hector N. Campos Sr., a former vice president of the National Power Corp., to solve the current problem of high rates and outages.

In this issue, we’ll feature his only long-term solution: amend the Electric Power Industry Reform Act or EPIRA. Please read on.

“EPIRA can only be amended, not repealed. Privatization of NPC’s assets is ‘toothpaste already out of the tube’. But deregulation of the electric supply industry can be amended.

(California had the conviction that deregulation of the airline, natural gas, railroad and telecommunication industries, which resulted in annual savings to consumers, will apply as well in electric supply. With the benefit of hindsight, it has become skeptical about deregulation in the power industry – California’s power bill rose from $7 billion in 1999 to $28 billion in 2000.)

Complex process

“The amendment will be a complex process involving legal, system operation and economic issues. The straitjacket it placed on DOE rendering it ineffective must be removed. A think-tank comprised basically of experienced power engineers, CPAs and lawyers versed in electric supply is needed to draft the amendment. It should be divided into small sub-groups to be efficient.

“a. A fundamental and key factor in the solution of the high rates and brownouts [is that] more players should be enabled to invest in the power program to promote competition and avoid a monopoly in power generation.

“‘Small’ power proponents cannot obtain loans under a multiple PSA scenario. Amendment should enable them to meet the banks’ requirement of ‘minimum off-take’ for guarantee of payment of the loan. This is easier said than done, however. It will be a difficult process. But it needs to be done. 

“b. Reversion of system operations to the government (Transco)

“The nation’s welfare, not profit by private corporations, must be the guiding principle in discharging the function. In hindsight, it is seen that in a developing country, system operations must be regulated.

“(In the early ’90s, Pakistan requested the Philippines to lend some power engineers to serve as electric power consultants. Four NPC engineers (Polintan, Abinoja, Abesamis and Perlado) were sent to Pakistan. Their most significant recommendation was, “A developing country must retain management and control over its high voltage transmission system and not privatize it.”)

“It is ironic that EPIRA did the opposite.

“c. Construction of major hydro and geothermal plants to be given impetus again.

“With none constructed since 2001, it means the government should again take the initiative. NPC’s Engineering department needs to be revived with authority to construct power plants for contingency purposes (construction of ‘identified’ power projects to avert power shortage in the event the PDP has no ‘committed’ proponents).

“The ‘flavor of the month’ should be renewable energy, not the current coal-fired power.

“As explained, NPC’s image and solvency has been damaged. It is heavily indebted not because of its own undoing, but as a result of (past) presidential mistakes. To be able to obtain project financing, its indebtedness should be transferred to PSALM. This is a difficult process, but the end-result will help ease the high rates and brownouts.

“d. Return of system planning to NPC or integrated with system operations in TransCo.

“System planning and system operations need close coordination, and these functions need to be reverted to the government.

Importance of system planning

“System planning, besides restoring the stability of electric supply, will accelerate the following:

“1. Reliability projects that do not earn revenue but which are on back-burners. The plan of NPC to construct the Alaminos (Laguna) extra high voltage 500-KV switching station so that if one EHV line ‘trips’ out, its load is automatically transferred to the other line to maintain stability of the system, has remained on the drawing board for two decades now.

“2. Economic projects like NPC’s plan to interconnect Luzon, Visayas and Mindanao. Surplus power in one grid that could be availed of by other grids and thus minimizing construction of power plants and improving system economics have likewise remained on the drawing board.

“3. Conceive a plan of restoring government calamity response.

“When Mt. Pinatubo erupted in the early ’90s, on the appeal of then Gov. Deloso of Zambales for assistance, NPC dispatched teams from all provinces of Luzon to restore power in a matter of days. NGCP, which took over Transco’s functions, cannot be expected to replicate this kind of calamity response.

“e. Solar power must be given more impetus.

“The price of oil and coal will always be volatile. The United States, despite its discovered huge Nebraska oil deposit, is installing large solar plants, e.g., the 180-MW Solana Solar in Gila Bend, Nevada. South Korea gives 30 percent subsidy to households installing solar units. Even Saudi Arabia is embarking on large solar plants in anticipation when the oil runs out.

“The Philippines has the highest ‘irradiance’ (direct sunlight) in the world. With continually decreasing solar capital costs, the Philippines’ solar program should be given focal attention.

 “A proposal to install solar units that will save fuel during the day and could be used at night to lengthen service hours was doused with cold water by DOE’s lawyers who opined that ‘It contravenes the law. The solar proponent has to buy SPUG’s diesel plants.’

“DOE’s ceiling for solar power of 100 MW needs review.”

Champions League 2014 National Collegiate Championship

The Naga College Foundation (NCF) Tigers captured the Champions League (PCCL) South Luzon-Bicol regional championship held at at J.C. Lobredo Coliseum, and hosted by Naga City Mayor John Bongiat.

The NCF Tigers advance to Luzon-Metro Manila Qualifying games and will clash with NCR qualifier Diliman College Blue Dragons in the first stepladder knock-out games to be held on Nov. 7, 2014, at FAITH Gym, Tanauan City, Batangas.

All the stepladder knockout qualifying games will be held at FAITH Gym, Tanauan City, Batangas, starting on Nov. 7 up to Nov. 10. The games will be covered live by ABS-CBN Sports and Action channel from 2 to 6 p.m.

The Champions League (PCCL) National Collegiate Championship is sponsored by media partners ABS-CBN and Philippine Star, Phoenix Petroleum, Molten Balls, Fil-Oil Flying V Sports, Fog City Creamery and Foccacia. Tickets are available at SM Tickets online.

Visit www.CollegiateChampionsLeague.net for more details about the nationwide competitions.   

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