Climate and energy group Institute for Climate and Sustainable Cities (ICSC) called for the immediate appointment of the Energy Regulatory Commission chairperson amid the prolonged shutdown of power plants and the thinning of Malampaya gas reserves that have led to high electricity prices.
ICSC also welcomed the appointment of former Energy Secretary Raphael Perpetuo Lotilla replacing former Secretary Alfonso Cusi.
ICSC senior policy advisor Pete Maniego Jr. said Lotilla’s appointment is a good choice since he is competent to lead the industry.
President Ferdinand Marcos Jr. has not announced the appointment of a new ERC chairperson to replace Agnes Devanadera, who recently retired.
“The appointment of an Energy Secretary is very urgent due to the many serious problems facing the sector. There is insufficient power supply mainly due to the prolonged shutdowns of several coal-fired power plants, the intermittent breakdowns of several coal-fired power plants, and the derating of natural gas power plants caused by Malampaya gas supply restrictions,” said ICSC senior policy advisor Pete Maniego Jr. prior to the announcement
Maniego said prices at the Wholesale Electricity Spot Market (WESM) rose because of the chronic power shortage, prompting the imposition of a secondary price cap to arrest the spikes.
He cited WESM’s average price of P9.66 per kWh in the Luzon grid on June 30 and high peak price of P29.10 per kWh.
Maniego said fossil fuel prices were expected to spiral due to the Russian-Ukraine conflict.
“This would continue to increase electricity rates until the conflict, and the resulting energy shortage are over. The DOE and ERC would need firm hands to cope with the current crises,” Maniego said.
He said the next DOE secretary and ERC chairperson should be highly knowledgeable about the energy sector, preferably with relevant technical, engineering and economics background.
He also cited a prohibition in the DOE Act against the appointment of anybody who had worked in the energy sector within the past two years as DOE secretary.
“However, there must be many qualified persons who have either retired or moved to a non-energy company for more than two years,” the ICSC official said.
Maniego said the ERC chairperson must be a member of the Philippine bar as required byElectric Power Industry Reform Act of 200.
“If the next chairman will not possess the relevant technical experience, the next ERC commissioner to be appointed must preferably have a technical background and energy experience,” he said.
Meanwhile, Maniego urged the DOE to make the coal moratorium permanent to affirm the country’s commitment to clean energy as envisioned in the Philippines’ commitment under the Paris Agreement.
“Our over dependence on fossil fuel plants, particularly CFPPs (coal-fired power plants), has proved economically disastrous. The continuing lack of energy security has hampered our country’s development, with our ASEAN peers leaving us behind and graduating to developed economies level. The CFPPs, which were supposed to provide dependable base-load supply, turned out to be the culprits in the recurring yellow and red alerts,” Maniego said.
He said the automatic fuel cost pass-through on fossil fuel power plants, which completely transfers the fuel risks from the power producers to end users, should no longer be applied in all power supply agreements.
Maniego also proposed the conversion of all diesel gensets in off-grid areas to hybrid systems that would lead to the eventual phaseout of universal charge for missionary electrification and savings of P10 billion per year in subsidies.