Economy


Lawmakers urge another look at nuclear plant




Posted on January 17, 2014


LAWMAKERS yesterday revived calls to look into the mothballed Bataan Nuclear Power Plant (BNPP) to address the rise of power rates in the country.

In a phone interview with BusinessWorld yesterday, House Committee on Energy Chairman and Oriental Mindoro (second district) Rep. Reynaldo V. Umali said it was time for Congress to revisit the BNPP.

“It’s about time that we discuss the Bataan [Nuclear] power plant and see if we could use it to address current and potential power crises,” he said, adding that with the coming regional economic integration, the government needs to tap other power sources to supply the power industries require.

Mr. Umali added that the Energy committee has vowed to resolve the issues surrounding the BNPP “once and for all”.

“We’re spending millions of pesos every year on the maintenance of this power plant, and we’re not benefitting from it. It’s time that we put an end on issues hounding the BNPP and ascertain if, in fact, the government has plans to use it or not,” he said.

In a text message to BusinessWorld yesterday, House Committee on Energy Vice-Chairman and Marikina City (second district) Rep. Romero “Miro” S. Quimbo said: “I have committed to study this matter. We see the enormity of the problem [in the power sector], and we need to look at all possible solutions,” he said.

House Committee on Labor and Employment Chairman and member of the Energy Committee and Davao City (first district) Rep. Karlo Alexei B. Nograles said in a separate text message that, given the power situation in the country, all alternatives must be considered to address the power crisis.

“There have been attempts in previous Congresses to study this proposal. Certainly, given the power situation in the country right now, we must explore all possible alternatives,” he said.

The lawmakers’ comments followed a press conference yesterday, when House Committee on Appropriations Vice-Chairman and Northern Samar (second district) Rep. Emil L. Ong said: “The Bataan Nuclear Power Plant should be revisited as it might help solve the current problem on the unabated power rate hikes.”

Construction of the BNPP began in 1976 under the martial rule of former President Ferdinand E. Marcos in response to the 1973 oil crisis, as the Middle East oil embargo had put a heavy strain on the Philippine economy.

Mr. Marcos then believed nuclear power to be the solution to meeting the country’s energy demands and decreasing dependence on imported oil.

The BNPP never went into operation because it sits near fault lines and the Mount Pinatubo volcano.

The House Committee on Energy is set to tackle proposals related to the review of the BNPP “late on March or early April”, after it finishes its on-going investigation on the alleged power collusion leading to the rise in Manila Electric Co. (Meralco) power rates, as well as the allegations surrounding the oil spill in Estancia, Iloilo.

For his part, Kabataan Partylist Rep. Terry L. Ridon yesterday assailed proposals to restore the BNPP.

“The revival of the BNPP is irrelevant to the present problem of collusion among power utilities in the determination of prices, “he said.

“For as long as the rate system under the EPIRA (Electric Power Industry Reform Act of 2001) remains flawed, a nuclear plant won’t ensure a lower rate for the public,” Mr. Ridon added.

Several lawmakers also reiterated the need to pass an Anti-Trust law and amend the EPIRA to promote competition in the power industry and prevent cross-ownership in the generation and distribution of electricity.

At the same press conference yesterday, Deputy Majority Leader and CIBAC Partylist Rep. Sherwin N. Tugna said: “For me, we have to revisit and amend the EPIRA, particularly the automatic pass-on rates on consumers. We also have to revisit the role of the ERC [Energy Regulatory Commission] in particular -- their authority, responsibility.”

AKO Bicol Partylist Rep. Rodel M. Batocabe, also at the press conference, said that part of the EPIRA amendment should contain provision to prevent cross-ownership in the generation and distribution of electricity, to avoid conflict of interest. He also urged Congress to pass an anti-trust law to prevent monopoly in the power industry and promote competition.

“[Congress] should revise the EPIRA law and pass an anti-trust law to prevent cross ownership and conflict of interest in the power sector,” he said.

For his part, Deputy Minority Leader and Bayan Muna Partylist Rep. Neri J. Colmenares, at the same press conference, called for scrapping the EPIRA and “to craft a new legislation” that would prevent such cross-ownership and remove the Wholesale Electricity Spot Market (WESM).

Mr. Colmenares also proposed that the value-added tax on systems loss be removed to lessen the power cost passed on to consumers.

He alleged that Meralco practically dictated WESM prices through Aboitiz-owned Therma Mobile’s “suspicious” biddings during the Malampaya natural gas field shutdown.

Citing documents from WESM, he said that Therma Mobile sold 100 megawatts (MW) of power, which was supposed to be under contract with Meralco, to WESM for P62 per kilowatt-hour 71 times in November and December.

“We don’t need to prove price collusion in essence. When Meralco confirmed that it asked Therma Mobile to bid power rates at P62, for us, the case is done,” Mr. Colmenares said.

He also claimed that Therma Mobile Chief Executive Officer Erramon Aboitiz admitted that the company made very high bids but passed the responsibility to Meralco because the latter has “full control of the use of the 100 MW power from Therma Mobile, including pricing and volume offers to the WESM.”

“[Therma Mobile] is a mere implementor of Meralco’s price and volume offers to ... WESM,” Mr. Colmenares said.

He also said that the collusion jacked up not just prices in WESM but in the whole power market, effectively affecting prices of power outside Metro Manila.

Meanwhile, to fast-track proposals to amend the EPIRA, House Committee on Metro Manila Development Chairman and Quezon City (second district) Rep. Winston “Winnie” Castelo, in a press statement yesterday, urged Malacañang to certify these measures as urgent.

Mr. Castelo noted that Section 73 of the EPIRA provides for a “Lifeline Rate”, setting a socialized pricing mechanism for low-income power consumers, but only for a period not exceeding ten years. Thus, as the EPIRA took effect in 2001, the provision expired in 2011 and is said to have spurred the skyrocketing of power rates in the country.

“This 2014, when the general direction of the government is to uplift the economic welfare of the poor who were recently blighted by natural calamities and man-made strife, legislative agenda should be crafted so as to favor them,” Mr. Castelo said.

Earlier, Manila Electric Co. (Meralco) secured regulatory approval to implement a P4.15-per-kilowatt-hour rate hike to be implemented in three tranches: P2.41 per kWh last December, P1.21 per kWh in February, and P0.54 per kWh in March.

Power plants reportedly went on simultaneous outage during the maintenance shutdown of Malampaya natural gas plant, scheduled for Nov. 11 to Dec. 10. This resulted in higher prices in WESM, leading in turn to Meralco’s price increase.

Following allegations of collusion among power industry players, the Supreme Court issued a 60-day TRO -- in effect since last month -- on the implementation of the P4.15/kWh rate hike. A portion of the planned rate increase was supposed to have been collected by Meralco from all of its subscribers starting last month.

The High Court is set to conduct its oral arguments on the matter on Jan. 21.

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by Philippine Long Distance Telephone Co. (PLDT). Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld. -- Imee Charlee C. Delavin