Congressmen on Thursday cited the need to build more power plants on rising power demand amid the sustained economic growth.
Rep. Lord Velasco of Marinduque, chairman of the House committee on energy said more power plants were needed as energy demand was rising 600 megawatts annually.
“We cannot keep delaying these projects as we need stability of energy supply. If there are shutdowns by these old plants, that will mean a spike in prices. We need to stop pointing fingers and putting malice, and already start these new projects,” Velasco said during a recent committee hearing.
Velasco said the Philippines’ energy demand was growing 4.9 percent annually, or equivalent to 600 MW in additional capacity.
Velasco said around 20 percent of the existing power plants were more than 30 years old.
Power retailer Manila Electric Co. earlier expressed concern over the series of “yellow alerts” which showed the “vulnerability” of the Luzon grid.
Meralco said that while over 1,000 MW of power output was added last year, “the rise in demand is soaking up new capacity.”
House Minority leader and Quezon 3rd District Rep. Danilo Suarez said the entry of more power plants would help generate much-needed baseload in the country.
Suarez said the delays in the application process at the Energy Regulatory Commission could force investors to back out and the country could lose the opportunity to address its thin power reserves.
Grid operator National Grid Corporation of the Philippines declared five yellow alerts from August to September, reflecting the thin power reserves in Luzon.
Suarez said there was a need to consider the time element in building power plants in the wake of the series of yellow alerts in Luzon.
“Remember the dark days when we had to buy and commission gas-powered barges? It is crucial for the energy body to give the green light to applicants that complied with the regulatory requirements the authority to construct their power plants,” said Suarez.
Suarez asked during the hearing why ERC was delaying the approval of power supply agreements, a regulatory requirement to construct power plants for generation companies.
ERC earlier defended the delay, saying it was scrutinizing the power supply agreements in the wake of questions raised by various sectors.
Suarez questioned why the regulator had not approved Atimonan One Energy’s coal-fired power plant in Atimonan, Quezon, which could have spurred economic activity in the said area.
“We have to quickly resolve this and be considerate with investors. Time is cost if we continue to delay the approval process,” Suarez said.
The House energy committee hearing was conducted to investigate allegations that Meralco’s power supply contracts with seven generated companies did not undergo competitive bidding and thus were disadvantageous to consumers.
Bayan-Muna party-list Rep. Carlos Zarate filed a resolution questioning ERC’s postponement of the Nov. 6, 2015 deadline for distribution firms like Meralco to conduct a competitive selection process for procuring their power supply.
Zarate alleged that the extension to April 30, 2016 favored Meralco, which forged 20-year power supply deals with seven generation companies.
The agreements were allegedly signed just days before the new deadline, hence the allegation of “midnight” deals.
I-Care party-list Rep. Carlos Uybarretta rebutted the allegations, saying that there was no accommodation made by ERC.
Uybarreta recalled the long and thorough process of evaluating a PSA from his past experience with ERC, and defended the regulating body saying “there was no advantage given to anybody.”
Uybarreta also challenged the intent of the allegations, questioning why they only focused on the seven PSAs, and not on the rest of the applications.