Gov’t re-entry in the power sector needed, not emergency powers: deputy speaker

House Deputy Speaker Lorenzo Tañada said that a Congressional grant of emergency powers to the President to afford him the flexibility to address the Mindanao electricity shortage is not needed.

He said that the immediate measures available to alleviate the situation are straightforward, and which the Department of Energy (DOE) has already committed to help facilitate.

The congressman cited fast tracking the operation of a diesel power plant lying idle in Iligan, the immediate transfer of power barges 101 to 103 from Panay to Mindanao, and the strict coordination of the load-to-maintain schedule of distribution utilities to rationalize the allocation of available power.

The deputy speaker added that the hard reality is that Mindanao will have to deal with a combination of tight supply and higher rates for now and the bigger challenge is for the medium and long term, and it involves not just Mindanao but the whole country.

“By DOE’s own reports, it is clear that the capacity addition requirements in its power development planning over the last decade, particularly the baseload plants, have not been sufficiently met. While our attention is now focused on Mindanao, Luzon is also nearing critical supply levels. Visayas supply levels have only recently eased up, but could again turn critical in a few years,” Tañada said.

Tañada said that it is about time that “we realize that the insecurity of our power system is the result of a structural defect introduced by the Electric Power Industry Reform Act (EPIRA).”

He said that it was a grave error for EPIRA, as envisioned and implemented, to have removed government role in power generation in a liberalized setting and “given the technical and financial characteristics of power generation, and coupled with regulatory and market uncertainties, market failures are expected”.

The deputy speaker said that the time is ripe for government re-entry in generation where it will be a player alongside private corporations and “this will give us the flexibility to respond to situations when markets fail, or when strategic public interest is not adequately served by the private sector”.

Tañada said a re-entry by government in generation will not require new legislation.

“If we look closely at EPIRA, it is only the National Power Corporation (NPC) that has been prohibited from putting up new capacity or incurring new obligations to purchase power,” he said.

Tañada said the Agus and Pulangui power facilities could be the government’s starting assets for its re-entry into generation.

“We can also add other strategic facilities, such as the Caliraya-Botocan-Kalayaan (CBK) facility, which Sec. Almendras has noted to be a critical asset for the stabilization of the Luzon grid,” he added.#