Take politics out of power sector–Teodoro

Take politics out of power sector–Teodoro
Philippine Daily Inquirer

MANILA, Philippines—The next administration should ensure a transparent and politics-free power sector if it wants to attract investment in new generation capacity and finally put an end to power problems.

Speaking at the Wallace Business Forum roundtable discussion yesterday, administration presidential candidate Gilbert Teodoro said there was clearly no quick fix to the supply shortage that the country is currently experiencing.

Such band-aid solutions as importing modular generators and deployment of power barges will do for now, but what the country needs is something long-term and sustainable, according to Teodoro.


“There’s a lack of generating capacity, so we need to get investments in that. What [a Teodoro administration] can guarantee is transparency in all transactions,” he said.

“We have to address the problem of long-term assurance of non-political controversies for the sector. We have to be transparent in negotiations,” he said.

According to Teodoro, many Filipinos believe that the only way to ensure transparency in transactions is to have them go through public bidding.

“But you can have a requisite amount of transparency in negotiations. These just have to be conducted under the right terms,” he said.

In terms of regulatory stability, he said the Energy Regulatory Commission (ERC) was actually “doing a good job” of setting rates and looking after consumer welfare.

As for an issue that is a major concern to power sector investors—that of the Supreme Court reversing decisions made by the regulatory body—Teodoro said the high tribunal was in a position to step in because the ERC was a quasi-judicial body.

Renewable energy

However, the high court “should just stick to determining whether or not there was grave abuse of discretion, and leave the rate-setting to the ERC,” he said.

Teodoro also expressed his support for renewable energy, but stressed that the use of such resources should ultimately result in reasonable power rates.

“We have to strike a balance between sustainable and renewable and affordable,” he said.

“In the long run, we have to have sustainable renewable energy, but we would have to appoint a good steward for this. [Former Energy Secretary Francisco] Viray is a good choice,” he said.

He also believes that the country should explore the nuclear power option, but only if safety and waste disposal issues can be addressed.

“We have to tackle the safety issue and waste disposal. If we can get a good system for disposing waste, then we should invest in nuclear power generation. As for the location, there are 7,107 islands in the Philippines. I’m sure we can find a non-controversial island where we can place a nuclear power plant,” he said.

“There is also the need to educate people on the safety issues. We have to tell them that it will be cheaper and cleaner to produce power from nuclear sources. People have to be educated,” he added.

But he said resuscitating the mothballed 620-megawatt Bataan Nuclear Power Plant was not the way to go.

“It’s really not feasible,” Teodoro said.

Abigail L. Ho

Arroyo eyes crisis powers

Arroyo eyes crisis powers
Brownouts in Mindanao worsening

By TJ Burgonio
Philippine Daily Inquirer

MANILA, Philippines — President Gloria Macapagal-Arroyo plans to declare a power crisis in Mindanao in the next few days to give the government more leeway in dealing with the worsening supply shortage on the island, Malacañang announced Thursday.

The announcement came as the power supply in the Luzon and Mindanao grids further worsened on Thursday. Since Monday, Metro Manila and other parts of Luzon have been suffering from rotating brownouts.

Ms Arroyo said she concurred with Energy Secretary Angelo T. Reyes on his proposal to declare a crisis and allow the government to contract for generation sets for Mindanao.

“Yeah, yeah, I’m adopting his recommendation,” Ms Arroyo curtly told reporters after emerging from the awarding ceremonies for the outstanding Philippine soldiers in Malacañang.

Reyes had said the declaration would allow the government to invoke Section 71 of the Electric Power Industry Reform Act and enable state-run National Power Corp. to buy or lease modular generation sets to augment the island’s power supply.

“It will be just a matter of days before she makes the declaration,” Secretary Ricardo Saludo, deputy presidential spokesperson, later told reporters in a regular briefing.

A prolonged dry spell has reduced the generating capacity of the island’s hydroelectric power plants by 80 to 90 percent, resulting in rotating brownouts.

Hydroelectric plants (whose turbines are powered by running water) used to supply 53 percent of Mindanao’s power needs.

Breakdown, maintenance

Luzon and the Visayas are also experiencing a power supply shortfall because of the breakdown or maintenance of power plants and the reduced generating capacity of hydroelectric plants.

National Grid Corp. of the Philippines (NGCP) said the deficit in Luzon jumped to 446 megawatts (MW) while that in Mindanao surged to 650 MW as of Thursday morning. The shortfall in the Visayas was placed at 40 MW.

Power distributor Manila Electric Co. announced one-hour rotating brownouts Thursday between 10 a.m. and 5 p.m. in several areas in Metro Manila and nearby provinces.

Power supply in Luzon fell after Aboitiz Power Corp.’s Magat hydroelectric plant was unable to operate beginning Thursday due to the low water levels at the reservoir. It was running and contributing 30 MW to the Luzon grid as of Wednesday.

Once Ms Arroyo declares the power crisis in Mindanao, Congress has to draft the rules and regulations for contracting additional generating capacity, according to Saludo.

Special session

“In the event that a power crisis is declared by the President, then a new generating capacity may be contracted by the government pursuant to procedures outlined or laid down by Congress,” he said.

But it was up to Congress whether to call a special session, Saludo said.

In a report to Ms Arroyo, the Department of Energy said there “exists a power supply crisis” in Mindanao amid the El Niño phenomenon.

The department recommended the adoption of urgent measures such as the lease or rental of modular generating sets that could add 160 MW; operation of the Iligan diesel-power plant that could add 50 to 65 MW; and increased contracted capacity from Southern Philippines Power Corp. for 5 MW, according to Saludo.

Higher rates

On top of these measures, Saludo cited the need for the Energy Regulatory Commission (ERC) to act on generating companies’ petitions for cost recovery.

The petitions would allow the companies to cover higher fuel expenditures and “thus ensure uninterrupted fuel deliveries,” he said.

“The situation in Mindanao has become more grave. Addressing the power situation would demand action by the ERC,” he said.

Saludo noted that some firms could not order oil or diesel because they were apprehensive that the increase in the cost of fuel would not be covered by their charges.

“These petitions would need to be addressed to give security to power companies,” he said.

He assured the public that the power supply in Luzon and the Visayas “will reach sufficiency this month.”

Brownout in Baguio

An unannounced two-hour brownout struck Baguio City due to outages traced to four power plants in Central Luzon and Southern Tagalog, according to an NGCP official.

On March 1, a two-hour brownout struck the summer capital during the Philippine Military Academy graduation rites attended by President Arroyo.

The Kalayaan 2 generating unit in Laguna has been unable to provide power “due to low water levels,” said Albert de la Cruz, the NGCP engineer overseeing the La Trinidad, Benguet, substation.

NGCP reported that outages occurred at the 315-MW Masinloc 1 facility in Zambales, and the 180-MW coal-fired Calaca 2 and the 1,200-MW Ilijan natural gas plant, both in Batangas.

First Gas Power said its 1,000-MW natural gas plant in Sta. Rita, Batangas, did not suffer a major breakdown on March 2. The company said its Module 30 was on reconditioning stage after a scheduled preventive maintenance.

Outage in Pangasinan

In Pangasinan, the Central Pangasinan Electric Cooperative announced a power interruption scheduled for March 9 in several towns to give way to the annual maintenance of its lines and meters.

The 11-hour brownout from 7 a.m. to 6 p.m. would affect the towns of Bugallon, Aguilar, Mangatarem, Urbiztondo, Lingayen, Binmaley and parts of Basista and Malasiqui and San Carlos City.

Areas covered by the Dagupan Electric Corp. (Decorp) suffered an unscheduled hour-long blackout on Wednesday.

The Decorp operations manager, August Sarmiento, said NGCP did not inform the company that it was cutting power from the electric company.

“The NGCP just dropped us because of the deficiency in the system, [but they did it] without informing us,” Sarmiento said.

Baffling to Villar

The nearly simultaneous breakdowns and repairs of power plants that have led to outages throughout the country have baffled Nacionalista Party standard-bearer Sen. Manuel Villar.

Speaking in Nabunturan, Compostela Valley, Villar said the situation might be part of forthcoming sinister events that could affect the elections.

At the Bulawan (Gold) Festival, jewelry seller Annie Adajar said the blackouts that hit Compostela Valley since February had affected the mining industry and her family’s business. With reports from Amy R. Remo and Nikko Dizon in Manila; and Vincent Cabreza and Yolanda Sotelo, Inquirer Northern Luzon