CA seal on energy chief

LONDON – Before we left Manila last week, the appointment of Department of Energy (DOE) Secretary Alfonso Cusi Jr. failed to get the immediate nod of the powerful Commission on Appointments (CA). Following questions raised by Senator Panfilo “Ping” Lacson Jr. on the nomination of Cusi, the 25-man bicameral body deferred the confirmation of the DOE Secretary until the latter fully responded to the concerns of the senior member of the CA.

In blocking the confirmation of Cusi, Lacson was apparently irked on the report by the acting DOE Secretary that 100 percent of the country’s barangays have already been energized.  On the contrary, Lacson echoed report reaching him that there are barangays in the far north that are yet to have access to electricity.

It was clear, however, Lacson was not holding the newly installed Energy chief fully responsible for whatever inaccuracies there may have been in the figures submitted to the CA on the status of barangay electrification. Cusi has barely warmed his seat and still has to depend on the figures supplied him by the bureaucrats in the Energy department.

Lacson also questioned the professional qualifications of Cusi at the same CA hearing.  He noted the lack of exposure on the part of Cusi in the power sector, citing in particular the professional background of the acting DOE secretary’s is on “logistics and shipping.”

But that would be unfair to Cusi if such professional background would be raised against him. Many of Cusi’s predecessors as energy secretary did not come from that sector.

Like any other Cabinet and other presidential appointments, they are all political appointees. Thus, these political appointees were named to their respective posts based on trust and confidence of the President as the appointing authority.

The concern about Cusi’s professional background may have to do with the risk of the energy head being given the run around by the power interests that tend to dominate that sector. The concern may have already been answered by the fact that Cusi has a good team in place.

In a previous column, we cited the strong alliance between Cusi and Energy Regulatory Commission (ERC) chairman Jose Vicente Salazar. We noted that Harvard-trained Salazar is both an electrical engineer and a seasoned lawyer, having once been national president of the Integrated Bar of the Philippines (IBP). Salazar’s technical and legal abilities already provides Cusi a crucial back-up as the latter deals with the crucial issues facing the industry.

Salazar had earlier backed Cusi’s plan to tap part of the Malampaya funds to payoff the stranded power generation costs that are being passed on to consumers. The plan is being met with opposition based on legal standpoints. With the regulatory agency standing behind the department, hopes are high that the legal obstacles can be hurdled.

Cusi had earlier debunked rumors that his appointment to the energy post was “sponsored” by a big business conglomerate which has huge interests in the power sector.

This may have further been demolished by the recent actions of ERC’s Salazar to include business giants in the agency’s ongoing probe of alleged collusion in the power sector that led to spikes in the price of electricity.

Cusi’s team plus his confirmation by the CA should now lay to rest fears that the energy secretary might have a hard time pushing for crucial reforms in the power sector.

Among the reforms being eyed by the DOE under Cusi’s watch is the expansion of the contribution of renewable energy (RE) in the country’s power mix. According to media reports, the DOE plans to give geothermal and wind power the major push under the Duterte administration.

The department is reportedly set to make a fuller assessment of the country’s geothermal resources and complete an ongoing study of the potential for expansion for wind-powered electricity generation.

The push for geothermal energy expansion from Cusi is crucial. True, the country is the world’s second largest producer of geothermal energy, second only to the United States. We have an installed capacity of some 1.9 gigawatts. Based on reports by international organizations, this accounts for about 12 percent of the total power supply of the country.

However, the same agencies noted that there have been no new geothermal projects since 2010, the year former President Benigno “Noy” Aquino III took over. This is unfortunate considering studies show that the country may have some 4,000 megawatts of untapped geothermal energy.

From DOE study, as much as potential 76,600 megawatts (MW) in additional electricity supply in untapped wind power resources abound in the Philippines. Cusi’s bid to have more accurate data on available renewable energy  resources is important if we are to attract more international investors into the power sector.

In addition to reliable data, there are other requirements. According to a recent publication by the International Energy Agency (IEA), attracting investment in power generation requires a clear definition “of the government’s role in electricity market reforms.”

The IEA paper stated: “The government’s role must be clearly set out both as the agent of the reforms and in its energy policy involvement.”

One of the most important reforms must take place in the frontline agencies like the DOE. The government must send clear signals that it intends to deliver efficient services to industry players, especially with us electricity consumers as ultimate beneficiaries.

The CA seal on the new energy chief’s appointment would indeed be vital to the bid for genuine reforms in the country’s power sector.