PRESIDENT Simeon Benigno Aquino III does not really understand the power sector and is relying on equally uninformed people who misled the Chief Executive into asking for special powers that are not needed in the first place, according to Senator Sergio Osmena III.
Osmeña, chairman of the Senate energy committee, made the remark on Thursday after the House passed a joint congressional resolution granting Aquino special powers, but limited only to the Interruptible Load Program that had already been implemented without special powers.
Osmeña, related by marriage to the Lopez family which is one of the biggest players in the power industry, reiterated there is no need for special powers and Sen. Francis Escudero echoed the sentiment.
“I have already been burned by emergency powers,” Escudero said during the weekly Kapihan sa Senado news forum. “The last time we gave emergency powers related to electricity, prices went up as a result. So we should be careful if we will do that again.”
Escudero also doubted the need for special powers after the Department of Energy admitted to lawmakers that they are actually predicting a shortage in power reserves instead of an actual shortage in power supply.
“[The President] does not really know power,” Osmeña said on Thursday when told that the House had passed a measure granting Aquino special powers, but limited only to the Interruptible Load Program that the government has already been implementing since 2010.
“So he relies on people who don’t know power either,” he said, referring to Energy Sec. Jericho Petilla, who initially asked Congress to grant emergency powers to Aquino so he could contract generator sets to address a supposed power shortage during the summer months of 2015.
Even if the supposed shortage were real, Osmeña said the country’s energy regulators could have found a way to deal with if only they applied themselves.
“Believe me, we will have 1,600 megawatts,” Osmena said, referring to the amount of the power shortage that Petilla predicted during the summer months.
For one, Osmeña said the government should have talked to resort owners at Lake Caliraya in Laguna so that the CBK power plant there could pump more water it needs to produce more power.
“[The resort owners] have to take a backseat to the people’s needs for power. That’s an extra 100MW to 150MW,” said Osmena, stressing that Lake Caliraya was created as a water imponding facility and not as a resort lake.
He said the CBK plant has a stalled capacity of 750MW, but only delivers 500MW because they could not get additional waters after resort owners complained that they might be drowned.
He said the government can also generate more power if the Energy Regulatory Commission exempts hydro drams in Luzon from December to March from Wholesale Electricity Spot Market rules which prevent them from giving an additional 100-250MW during summer.
The hydro-electrict plant owners, Osmena said, are composed of the Aboitiz group, which owns Magat Dam, Ambuklao dam and Binga Dam; businessman Ramon Ang, who operates the San Roque dam and the Lopez group which operates the Pantabangan dam.
Osmena said he will ask the ERC to exempt the plants from WESM’s must-offer rule so that during summer, “we will have more power, so that’s another 100-150MW.”
At present, he said the Senate is still trying to get all the details on the cost and the legalities involved like the need for exemptions from the biofuels law for the Ilijan-Kepco.
“We might want to exempt the natural gas plant of Kepco-Ilijan from the Biofuels Act because the biofuels are very dirty so they have to clean the plant right after using the biofuel and it takes them five days to clean the plant.,” he said.
When that happens, the plant is offline and unproductive for five days and Osmeña does not want that to be lost. “Let’s exempt them from that, it’s a very small price to pay,” he said.
“And then, we want to keep hold of the Power Sector Assets and Liabilities Management (PSALM) because it will pay the extra storage to deliver diesel to Kepco Ilijan for their 2nd 600MW plant that they would not be operating because they lack storage facilities,” he said
“It costs less than a million dollars. Don’t let PSALM be left holding the financial bag there. So, we will be authorizing the President to use the Malampaya Fund,” Osmeña added.
But even if the government had the 1,600 megawatts it says it lacks, the DOE still will not be able to assure that there will be no power outages.
“Yes, we will still have outages, but short brownouts. Very short. Maybe 1-2 hours. It depends on the hottest day. Or if by accident, suddenly three big plants go down or a boiler explodes. We cannot predict that. That’s an act of God,” he said.
“It’s up to God. There will be so many (systems) that will go down during April and May, which are the hottest months. But I think normal outage we will be limited to three or four brownouts a year,” he also said.
Osmeña said the country, under its current situation, really has very low reserve power of about 19% and we expect 3-5 brownouts every year.
“In a situation where, like Singapore you have a 50% reserve, not 90, not 20%, but 50% you expect 1 brownout every 3 years,” he said.
Osmena reiterated that he does not see the need for the emergency power since everything seems to be in place. He said the ILP is in place to address the power outage.
“We have found certain solutions that would expand our reserve power. So, what is the House asking for? The 750MW? We have already looked for 600MW, plus another 300MW of hydro, plus another 300MW in full peaking plant in Malaya the moment it is fully repaired plus the ILP,” stressed Osmeña.
He said that in the ILP alone, we can already access 1000MW, and that is already de-rated, meaning we expect 1400 MW at 70% efficiency, it will be de-rated to 1000MW.
“So we will have sufficient power to say that our reserve of 1600MW will be covered,” said Osmena. “Now, I cannot answer why were they saying that the 1,600MW would not be enough.”
Kabataan party-list Rep. Terry Ridon, who voted in the House against the special powers, also saw no need for House Joint Resolution 21 which will result in “an open season for environmental degradation and abuse” because of the suspension of environment compliance certificates.
“Imagine, for five months, laws that protect our environment from exploitation and destruction together with labor laws that protect our workers from abuse, will totally be inoperable. It’s a very large window open for abuse,” Ridon said.
“Essentially, HJR 21 will exempt power industry players from any liability if they commit infractions against pertinent laws during the period covered by the measure. If ever a large-scale environmental disaster happens in that period, generating companies will go unscathed,” he added.
But Oriental Mindoro Rep. Reynaldo Umali allayed Ridon’s fears, saying the special power to be granted to the President will not result in an “open season for environmental destruction” since power plants will still be required to comply with environmental protection laws, albeit belatedly.
“Just because the laws are suspended for those five months doesn’t mean that power plants can ignore meeting the requirements to obtain an ECC (Environmental Compliance Certificate).
“After July, the companies would have to comply. If they don’t, their plants would have to stop [operating],” Umali told reporters at a press conference.
Umali said the cited Unit 1 of the Malaya Power Plant in Rizal which will be rehabilliyated soon as this would benefit once the implementation of environmental laws are suspended once the special power of the President is in effect.
“Malaya has emission problems and violates the Clean Air Act because it uses bunker fuel. If we don’t suspend the implementation of the Clean Air Act from March to July, we can’t operate Malaya. Its capacity of 300 to 500 MW can’t be tapped,” he said.
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