The opposition leader in the House of Representatives on Thursday warned that “suspicious” delays on the part of the Energy Regulatory Commission in approving contracts of power supply generators could turn off their potential investors, forcing them to back out and therefore losing an opportunity for the country to address its thinning power reserves at already alarming levels.
House Minority Leader and Quezon Rep. Danilo Suarez raised concerns over the recent spate of “yellow” alerts by the National Grid Corporation of the Philippines, a situation when reserve power falls below the required level.
“The ERC must fast-track the approval of the application for a power plant that would help generate much-needed baseload in the country,” Suarez said. “In fact, I find it puzzling why the ERC has not yet approved contracts of power supply generators even if it has already taken them at least five years to study their applications.”
Suarez said the ERC was established under the Electric Power Industry Reform Act of 2001 as an independent, quasi-judicial regulatory body. Maricel V. Cruz
“The Commission’s job is to promote competition, encourage market development, ensure customer choice, and penalize abuse of market power in the electricity industry. Unfortunately, it failed to fulfill its mandate, and it has been merely duplicating the functions of the Department of Energy,” he said.
Suarez stressed the need for the power sector to increase baseload of the Luzon grid and prevent yellow alerts, considering the time element in building power plants.
“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,” he said.
“Construction of new coal-fired power plants is necessary because the existing coal-fired power plants are outdated and insufficient, rendering them vulnerable to transmission failures,” the lawmaker added.
Power plants “are not off-the-shelf items: it takes seven to eight years to construct these before they become fully operational,” he said, thus, the ERC should take immediate action on the PSAs.
Asked why power costs continue to be high in the Philippines compared to its neighbors in ASEAN, Suarez said: “Foreign exchange and the international prices of fuel are the two benchmarks for the costing of energy in our country. Both of these are beyond our government’s control. Hence, we can see the utter uselessness of the ERC.”
Suarez cited in particular Atimonan One, a coal-fired power plant in Atimonan, Quezon that has not been cleared by the ERC until now, even if the generation company submitted its application in 2012. He said it is one of the seven PSAs that entered into a contract with the Manila Electric Co. (Meralco) which is still being evaluated by ERC.
“We cannot keep delaying these projects as we need the 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,” he said.
Suarez warned the ERC that if it continues in its foot-dragging with regards to power plant applications, he will propose next year that it gets a zero budget from Congress.
“We are hopeful that the ERC can approve at least three out of the seven PSAs before the year ends. Should these PSAs do not materialize, I will ask the leadership of the House to give it a zero budget early next year,” Suarez said.
“The ERC was initially given a P1,000 budget during the 2018 budget deliberations in the House; but its requested budget was eventually reinstated,” he recalled. “Now that the ERC has somehow stabilized after all the controversies it has been through, I hope we can soon see improvements in its performance.”