Noy may get special powers after all

MANILA, Philippines - President Aquino may get the special authority to address the looming power shortage this summer after all.

Sen. Serge Osmeña III, chairman of the Senate committee on energy, filed last week Joint Resolution No. 12, authorizing the President to address the projected electricity imbalance in the Luzon grid through the Interruptible Load Program (ILP), which could translate to an electricity cost of P7 to P9 per kilowatt-hour.

Under the ILP scheme, big power users will be asked to run their own generators when supply is short in the summer months instead of getting their power from the Luzon grid. In exchange, they will be compensated for their fuel costs.

The electricity that will not be taken from the grid will be available to households and other users, sparing them from rotating blackouts.

Osmeña is scheduled to sponsor the committee report on the resolution today, a development that moves the Aquino administration a step closer to getting the special authority for the power sector.

The House of Representatives has approved its version last year. Both the House and the Senate need to approve their respective versions before these are reconciled in a bicameral conference committee and finally approved into law.

Similar to the version approved by the House, the Senate resolution will cover the period of March 1 to July 31. According to the Senate version, the ILP would be activated whenever the net operating reserve of the Luzon grid is less than 350 megawatts.

There is a projected power supply shortage this summer of at least 700 MW due to higher demand during the hot months and not enough supply.

The Senate resolution provides for the “maintenance cost of at least P0.32 per kilowatt-hour in the compensation formula.” The compensation, which will be tax-free, will come from government royalties from the deep water gas to power Malampaya natural gas oil field in offshore Palawan.

It also directed the Energy Regulatory Commission (ERC), the power regulator, to amend existing ILP rules to expand the coverage of the program to include contestable customers of Retail Electricity Suppliers, end-users in economic and free port zone, and customers directly connected to the grid.

It also mandates the National Grid Corp. of the Philippines to administer the ILP for directly connected customers, recover the cost of ILP, and coordinate with power industry participants the maintenance schedules of generating facilities.