Malampaya Fund eyed for subsidy
MANILA, Philippines - Voting 149-18, the House of Representatives approved last night Joint Resolution 21, which seeks to grant President Aquino emergency powers for five months to address the expected power shortage in Luzon next year.
The measure would enable the President to deal with the shortage in power reserves from March to July, estimated by the House committee on energy at 1,004 megawatts.
Following a roll call of 174 House members, the measure was passed on third and final reading after being certified as urgent by Aquino.
Rep. Neri Colmenares of the Bayan Muna party-list tried to stop the voting, citing new information that an additional 500 MW are available for the Luzon grid.
This meant, he said, there is no need for the resolution or certain provisions as the expected power shortage can be covered by the interruptible load program (ILP), the scheme to be implemented under the measure.
Colmenares claimed the Department of Energy (DOE) apparently withheld the information from lawmakers.
Majority Leader and Mandaluyong City Rep. Neptali Gonzales II said the resolution was the House version, and the Senate will have its own.
“If there will be disagreeing provisions, then we will reconcile it with the Senate. If the Senate will not pass for some reason, then so be it,” Gonzales said.
Aquino sought last September the passage of the measure after the DOE raised alarm over what it said was an impending power crisis in the coming hot months.
Committee deliberations on Aquino’s own draft started in late September and proceeded swiftly, with two public hearings and eight technical working group meetings.
“We approved the emergency powers with a no-pass-on provision. The government will shoulder the additional cost of electricity. We are eyeing Malampaya funds as subsidy,” Oriental Mindoro Rep. Reynaldo Umali, chairman of the committee, said.
Umali was referring to the ILP where large industrial and commercial establishments would disconnect from the grid and use their own generators during peak hours to free up power supply for use of households and other users.
The government will reimburse firms participating in the ILP for fuel use and other operating costs and their expenses will be exempted from value-added tax as an incentive.
He said the estimated cost of the ILP should not exceed P200 million, far cheaper than leasing power barges, as Malacañang originally proposed, that could cost as much as P12 billion.
The resolution also mandates the fast-tracking of committed projects and power plants for interconnection and rehabilitation.
It also provides that energy conservation measures “shall be pursued vigorously in both public and private sectors.”
The authority to implement the ILP and other measures in the resolution will be effective during the period unless terminated earlier by Congress. The resolution also requires Aquino to submit a monthly report to Congress.
Higher electricity rates
Rep. Terry Ridon of party-list group Kabataan warned the nation that the President’s emergency powers could lead to higher electricity rates.
Ridon said the resolution “allows the setting up of expensive modular generator sets and bunker plants in the country.”
“These types of power generating plants are easy to install, and can already be operated within the period of emergency.
“While convenient, these plants are very expensive to operate and maintain. This would subject the public to an awesome economic burden, either through the use of public funds or higher electricity rates,” he said.
He added that although the authors of the resolution claim that the measure is focused on the so-called ILP, it does not foreclose the option for the establishment of new generating sets.
He stressed that the resolution broadly authorizes Aquino to “establish additional generating capacity.”
Ridon said with his special powers, Aquino “could suspend pertinent laws, rules and regulations that protect the environment and prevent abuse in the power industry.”
“Joint Resolution No. 21 will give Aquino the authority to waive the required technical, financial and environmental requirements of generation companies. It will result in an ‘open season’ for environmental degradation and abuse, given that the operability of several laws will be suspended from March to July next year,” he said.
He said under the measure, relevant laws, rules and regulations, including the Wholesale Electricity Spot Market Law, the Biofuels Act, the Clean Air Act, the Philippine Grid Code, the Philippine Distribution Code and other “environmental and labor laws that may affect the operation and transmission of the contracted generation capacities,” will be suspended from March to July 2015.
“Imagine, for five months, laws that protect our environment from exploitation and destruction, together with labor laws that protect our workers from abuse, will totally be inoperable. It’s a very large window open for abuse,” he stressed.
“Essentially, the resolution will exempt power industry players from any liability if they commit infractions against the environment. If ever a large-scale environmental disaster happens in that period, generating companies will go unscathed,” he added. – With Jess Diaz