House proposes reimbursement for ILP participants

Rappler.com
House proposes reimbursement for ILP participants
Are you an interruptible load program (ILP) participant? Congress is proposing government to shoulder your self-generation costs

MANILA, Philippines ­– A resolution filed by the House Committee on Energy Friday, November 14, proposes government to reimburse companies enrolled to the interruptible load program (ILP), a private-sector initiative meant to safeguard against possible outages in the hottest season in 2015.

The joint resolution, which also grants emergency powers to President Aquino to contract out additional generation capacities, orders entities with self-generating facilities (SGFs) to participate in the ILP – “[provided] that the government shall reimburse the owners of SGFs or backup generators for their use in accordance with the ERC (energy regulation council),” the Joint Resolution No. 21 reads.

This comes amid a feared shortfall of energy supply to meet the demand in the warmest season of next year, beginning March.

“We are running out of time. There are tax perks, such as VAT (value added tax) exemption that needs to be granted to ILP (interruptible load program) participants that would require legislation. But we do not have time for that anymore,” Oriental Mindoro Representative Reynaldo Umali said.

Umali, who chairs the Energy committee at the House of Representatives, said the resolution also mandates government agencies to retrofit their offices with energy efficient light bulbs and air conditioners, and solar energy systems.

ILP-enrolled establishments commit to disconnect from the grid and generate their own power for few ours.

The country’s largest energy distributor, Manila Electic Company (Meralco), said it is looking to expand the ILP to 500 MW. However, Energy Secretary Carlos Jericho Patilla said the ILP is not a guarantee a zero brownout next year.

That is why, according to Umali, a presidential emergency power is an urgent need.

“We need to pass this within November. We are in discussion with Senator Osmeña… and he is willing to support the joint resolution,” said Umali.

An emergency power, he said, would mean railroading steps to contract additional energy capacities, as well as providing “tax relief” to private companies listed in the ILP.

Meanwhile, Presidential spokesperson Herminio Coloma said President Aquino has signed an Executive Order (EO) that reduces real property taxes and penalties for independent power producers (IPP).

The EO, which was signed on October 31, “covers real property taxes and interest/penalties assessed on the power generation facilities of IPPs under build-operate-transfer contracts wit government-owned and/or controlled corporations.”

“This is to prevent any liabilities from the part of the National Power Corporation that could lead to an increase or spike in the cost of electricity,” the Palace said on Sunday, November 16.

Luzon is projected to bear a shortage of 1,004 megawatts in summer 2015, according to the Joint Resolution No. 21, “of which 600 MW is needed to meet the required dispatchable reserve, and 400 MW is needed to meet the required contingency reserve.”

“We really need that to address tax relief concerns of potential ILP participants. But we need a law on this. However, enacting a law takes a long time. So, what we need is special power for the President,” said Umali.

On Sunday, the National Grid Corporation of the Philippines (NGCP) reported an available capacity of 9,064 in Luzon, with a gross reserve of 2,778 MW. – Rappler.com

Interior of Robinsons Place shopping mall image from Shutterstock

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