Kept in the dark

 In what could be the most telling signs of growing apprehension and serious concerns on the electricity supply situation, the country’s biggest local and foreign business  groups have jointly come out with an urgent call to the Philippine government. It was addressed in particular to the Department of Energy (DOE) headed by Secretary Jericho Carlos “Icot” Petilla.

The foreign business groups are led by the American Chamber of Commerce of the Philippines (ACCP); the European Chamber of Commerce of the Philippines (ECCP); the Japanese Chamber of Commerce and Industry of the Philippines (JCCIP); and, the Korean Chamber of Commerce Philippines (KCCP). The local business groups are represented by the Employers Confederation of the Philippines (ECOP) and the Management Association of the Philippines (MAP).

Together, these local and foreign business groups issued a joint position paper that was published yesterday in three major national dailies, including The STAR. They called for a meeting of “joint stakeholders” to tackle specifically 13 issues to correct the way the government has been implementing the Electric Power Industry Reform Act (EPIRA).

The DOE is the government agency principally in charge of the enforcement and the implementation of Republic Act 9136, or the EPIRA. It was signed into law in June 2001. The landmark law mandated the privatization of all power plants of the heavily indebted National Power Corp. (Napocor) and the creation of spin-off companies to undertake the sale to the private sector of state-run power supply business; the creation of a new Energy Regulatory Commission (ERC); the setting up of the Wholesale Electricity Spot Market (WESM), among other reforms it sought to institute.

These reforms were supposed to ensure steady and reliable power supply and would enable the country to have the most competitive pricing for electricity as a major component of costs in doing business in the Philippines. But more than a decade since EPIRA was enacted, the Philippines remains among the countries with the highest power rates. Certainly, this is not making our country attractive for doing business, especially to foreign investors.

Calls to amend or junk EPIRA heightened after the Manila Electric Company (Meralco) was accused of colluding with power generators to raise  the price of electricity at the WESM. Meralco’s proposed power rate hike, said to be record breaking increase was stopped by the Supreme Court.

A number of lawmakers have vowed to bring to Congress the matter of amending the EPIRA as solution to these problems. But nothing so far has come out of these initiatives in Congress.

“Amending or making changes in the EPIRA will not solve the problems because EPIRA is not the problem, failure to implement it properly is,” the big businesses are telling our government. If EPIRA is sent back to Congress for review, they warned, “the uncertainty it will introduce into the regulatory regime of the power industry will lead to a potentially chaotic system, and worryingly put our future needs at risk at a time when our supply of power is marginal.”

Don’t they trust our lawmakers to exercise due diligence and prudence in the conduct of this legislative review? Such warning smacked of lack of confidence, if not an extreme judgment on our Congress. Well, we could not blame them, given the type of some legislators we have elected into office. 

They argued changing the rules of the game in midstream, as in amending the EPIRA, would only serve to discourage potential investors planning to put up new power plants here. For the past 13 years since EPIRA took effect, a number of foreign and local companies poured their investments into new power projects.

A number of these companies though merely bought the existing base-load power plants sold by Napocor. So not much was added to the power supply in the country. With an economy growing as much as 5 to 7 percent, the demand for power supply naturally has been going up.

That’s why we are having now the recurrence of sporadic blackouts in Luzon, Visayas and much worse in Mindanao lately. While we supposedly enjoy a growing economy, the power supply has not kept up to meet the demand for growth. Where are these investors on power projects?

Sought to react on this joint petition of business groups, Petilla did not categorically say if he is supporting moves to review the EPIRA. However, Petilla is advocating for the passage of a bill in Congress which will facilitate and fast-track the processing of various permits for energy projects deemed of vital national interest.

Petilla’s advocacy hews closely to the joint chambers’ petition urging the government “to streamline acquisition of permits and approvals from all local and national government agencies.” To do this, they suggested “to declare power plants as critical infrastructures or projects” eligible for registration with the Philippine Economic Zone Authority (PEZA). Now they’re talking.

The petition, however, came also at a time that Petilla’s nomination to the Cabinet of President Benigno “Noy” Aquino III remains hanging at the Commission on Appointments (CA). President Aquino appointed Petilla in October 2012 when the latter opted to cut short his term as Leyte governor to join the Cabinet.

As the first regular sessions of the 16th Congress adjourn sine die later this week, the CA winds down its last plenary session today without acting on the nominations of Petilla and other presidential appointees of P-Noy. Petilla’s woes at the CA stem from the stiff objections of Sen. Serge Osmeña III as chairman of the CA sub-committee on energy where his nomination has not even been calendared for public hearing.

The senator from Cebu has publicly declared he would continue to block the nomination of the DOE secretary whom he accused of lacking the managerial competence to head such an important executive department.

But as far as President Aquino is concerned, Osmeña’s criticisms on Petilla’s managerial competence do not hold water. So that’s where the impasse lies.

In the meantime, we will remain literally in the dark on what lies ahead of our country’s power situation if this impasse continues.