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Power woes to plague next administration

Posted on August 08, 2014

THE PHILIPPINE Chamber of Commerce and Industry (PCCI) expects the currently worsening power shortage to persist beyond 2016 to become a key challenge for the next administration, the country’s biggest business organization said in a statement yesterday.

Securing more power barges -- like this 100-MW floating facility of the Aboitiz group shown moored at Barangay San Roque, Maco, Compostela Valley in Mindanao in this undated photo -- is one of the stop-gap measures being considered by government to address the worsening power shortage. -- BW File Photo

“The serious concern about power supply shortfall in Luzon in 2015-2016, a similar potential shortfall in the Visayas and the ongoing shortage in Mindanao is definitely a deafening call for action -- a deliberate one that does not need to raise the panic button [sic] among the public,” PCCI said in its statement.

A check with the National Grid Corporation of the Philippines Web site yesterday showed generally thin reserves nationwide: 12 megawatts (MW) in Mindanao as system capacity of 1,337 MW barely covered estimated system peak of 1,325 MW; 89 MW in the Visayas with 1,626 MW in capacity against 1,537 MW in peak demand; as well as 1,682 MW in Luzon which had an estimated 9,113-MW capacity against a 7,431-MW system peak.

PCCI said that there are two critical periods the country faces in this issue, namely: 2015-2016 and the post-2016 period.

PCCI said the situation in the next two years can be managed without the need to declare a state of national emergency.

“The first (period) has to be confronted with basic stop-gap or band-aid measures,” the statement read, adding that “[t]here is no need to declare a national emergency” and “any steps taken to cure, to bridge or aid the gap would be acceptable to all.”

“The second (period) is different because it must be addressed by way of a well laid-out plan that is shared with all stakeholders and which government could smoothly and competently implement through the grant of emergency powers to the President, if the plan would warrant the declaration of a state of emergency,” the business group said.

“Without such a well-laid plan behind it, declaring a state of emergency would be dangerous and could eventually be counter-productive as we have experienced before.”

PCCI said no one should be surprised with the current situation since “over the last four to five years, the power supply-and-demand situation has been extensively presented and discussed in several consumer, business and government fora...”

The group noted that the private sector has proposed various ways to lure investments to boost generation capacity, including pooling demand of distribution utilities, opening the generation market to competitive bidding as well as streamlining the process of securing permits.

“The National Government should begin to earnestly consider these proposals and develop them into a road map consistent with the goals of adequate, reliable power supply and competitive power rates,” the statement read, ending with a call for “the exercise of strong and reasonable political leadership and will.”

PCCI also reiterated that there is no need to amend Republic Act No. 9136 -- or the Electric Power Industry Reform Act of 2001 (EPIRA) -- arguing that doing so would only “create unnecessary restlessness and uncertainties and slow down the present market and investment momentum.”

“If EPIRA is sent back to Congress for review, 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,” several business groups had said in a joint statement last May, as they reiterated the need to maintain “known” and “stable” investment rules. -- Claire-Ann Marie C. Feliciano