Petilla: No need for Aquino to invoke emergency powers if …

MANILA, Philippines – President Benigno Aquino III will no longer need to invoke emergency powers if the Power Sector Assets and Liabilities Management Corporation (PSALM) will be allowed to contract additional generation capacity to plug the projected supply deficiency in Luzon next year.

“We don’t have to invoke emergency powers if PSALM will be given the authority to contract additional capacity without involving Section 71,” Department of Energy (DOE) Carlos Jericho Petilla said.

In July, the energy czar recommended to the President to invoke Section 71 of the Electric Power Industry Reform Act (EPIRA) of 2001 so he could be granted emergency powers to address the power situation in 2015.

The EPIRA prohibits the government from putting up power plants. However, Section 71 of the law states that the President, upon determination of an imminent shortage of supply of electricity, may ask Congress for authority to establish additional generating capacity under approved terms and conditions. (READ: Power emergency: What it means)

The President has kept mum on Petilla’s proposal. Instead, he directed Petilla to coordinate with the Joint Congressional Power Commission (JCPC), Energy Regulatory Commission, industry stakeholders, and consumer groups to come up with solutions.

Petilla said they have written the JCPC. “Consistent with the President’s instructions during the 2014 SONA, we respectfully seek the Honorable Commission’s position on the proposal for PSALM to contract the additional generation capacities within the framework of the Republic Act No. 9136 or the Electric Power Industry Reform Act of 2001,” he said in his letter dated August 1.

Petilla earlier said demand in Luzon would be 9,011 megawatts (MW) next year, higher than this year’s 8,717 MW. He attributed the increase to the massive growth of the economy.

He said there would be a deficit of 200 MW next year. Energy supply would be thin by March to May, the months when demand usually peaks. To address this, he said an additional 400 MW to 500 MW capacity is needed to act as buffer supply.

Alternative solutions

The Department of Energy (DOE) is also in talks with the Lopez group to lease additional power capacity from First Gen Corporation from its Avion power plant complex in Batangas City.

Petilla said the DOE plans to lease 100 MW of capacity.

First Gen Senior Vice President Victor Santos said no agreement has been reached yet. “No discussion on leasing since terms and conditions are not yet final. Avion 1 will be developed as a merchant plant. We may consider developing Avion 2 when leasing terms become final.”

The DOE also suggested the enforcement of energy efficiency programs such as adjusting the work week from Monday-Friday to Tuesday-Saturday. It likewise proposed to limit the operation of billboards to cut down on electricity use.

The Manila Electric Company (Meralco) may also expand the Interruptible Load Program (ILP) “as a last resort.”

Under the ILP, customers with large loads will be asked to operate their own generator sets if the grid operator projects a need to augment generation capacity in the Luzon grid. Through this, the aggregate demand for power from the system will be reduced to a more manageable level, helping ensure the availability of supply.

Targeted ILP participants are malls, large business establishments, and factories. Among those that have signed an agreement on ILP with Meralco are Megaworld, Ayala Land, Robinsons Land, Shangri-La Malls, SM Prime Holdings, Metro Gaisano, and Waltermart.

The DOE proposed the mandatory participation of distribution utilities, contestable customers and large captive customers. ILP participants will be provided with “just compensation.” PSALM will administer the payment to participants. – Rappler.com