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Energy by legislation promotes corruption

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Bienvenido S. Oplas, Jr.

My Cup Of Liberty

Energy by legislation promotes corruption

When a “bright idea” needs legislation, 90 to 99% it is a lousy idea that will not work if not implemented by force, coercion and state favoritism. In contrast, many of the brightest innovations and successful business projects in the country and the world were born without legislation, they just prospered under a competitive environment.

Among the recent stories published in BusinessWorld pushing for some “bright ideas” are the following.

1. “Bring down electricity prices and the inflation rate will go down” by Roberto Verzola of AER, Oct. 22, 2018.

2. “No place for ‘dirty energy’ in ADB’s climate vision” by Yongping Zhai, Chief of ADB’s Energy Sector Group, Oct. 24, 2018.

3. “Solar dev’t agency bills filed in House,” Oct. 29, 2018.

In story #1, Verzola is lobbying for the enactment of HB 8179 or Solar Para sa Bayan Corporation (SPBC) franchise owned by Mr. Leandro Leviste, son of greenie Senator Loren Legarda.




If people are sincere in having real competition in power generation, distribution and supply, they better push further implementation of RA 9136 or the EPIRA law of 2001. Among the provisions of that law is retail competition and open access (RCOA) where non-franchised retail electricity suppliers (RES) can directly compete with franchised electric cooperatives and private distribution utilities nationwide. Houses, stores and schools in far away communities with no electricity can be aggregated to become “contestable customers/markets” and be qualified for electricity supply by any of the many ERC-accredited RES.

In story #2, Zhai and the ADB are indirectly lobbying for high carbon tax, which can be done only by legislation. ADB’s shadow carbon price is $36.30 per ton of CO2 to be increased 2% annually. That amount is high, 2x the price of carbon tax by end-October 2018 in the European Carbon Exchange (ECX). ADB wants two things then: (a) more expensive electricity for developing countries like the Philippines where coal power provided 50% of total electricity supply in 2017, and (b) unintentionally forcing people to use the real “dirty energy” — candles and gensets. When there are frequent blackouts as famous renewables solar and wind are highly intermittent, the poor will use candles (more fires, injuries and deaths) while the rich will use gensets (more air and noise pollution).

In story #3, HBs 8311 and 8326 propose to establish a Solar Energy Development Center (SEDC), HB 8337 and SB 497 seek to establish a Solar Energy Development Authority (SEDA). As if there is no RA 9513 or the RE law of 2008 which gives lots of favoritism to RE developers. And creating new bureaucracies will mean additional burden to taxpayers.

The endless lobbying in the country to glamorize wind-solar and demonize coal-oil do not realize that the Philippines is already #1 in the world in terms of environmental sustainability in its energy development.

Energy Ranking

The World Energy Council (WEC) publishes an annual study, the World Energy Trilemma Index. WEC is a UN-accredited global energy body with over 3,000 member organizations in over 90 countries, from governments, private and state corporations, academia, NGOs and energy stakeholders.

The Trilemma Index is composed of three factors:

(1) Energy Security — reliability of energy infrastructure, ability of energy providers to meet current and future demand,

(2) Energy Equity — accessibility and affordability of energy supply across the population, and

(3) Environmental Sustainability — energy efficiencies and development of energy supply from renewable and other low-carbon sources.

The results of Trilemma Index 2017 and 2018 ranking out of 125 countries covered may be shocking to the “kill fossil fuel” lobbyists and activists.

With very low rank in energy equity, we should call instead for reduction if not abolition of the distortionary feed-in-tariff (FIT) scheme, high oil and coal excise tax in TRAIN law. Stable and competitively priced energy, not more RE cronyism and legislation.

 

Bienvenido S. Oplas, Jr. is the president of Minimal Government Thinkers

minimalgovernment@gmail.com