Tripartite inspection of power plant shutdowns sought

A trade unionist stresses the importance of stable power supply and low power rates in attracting foreign investors and ensuring the competitiveness of local businesses

MANILA, Philippines – Power plant shutdowns should be physically inspected by a 3-party panel composed of representatives from government, civil society, and the power sector to prevent collusion attempts by power players.

This is according to Trade Union Congress of the Philippines (TUCP) executive director Louie Corral, who noted the swiftness of the order of Labor Secretary Rosalinda Baldoz for a tripartite inspection of Valenzuela city factories following a massive factory fire that killed at least 72. (READ: Dire conditions found in factories around Kentex)

Corral said such inspections should be preventive rather than reactive across industries, not just in manufacturing.

He urged the energy department to issue a department order allowing consumers to be represented in the inspection of outages in power plants.

In a recent interview, the trade unionist said such a move would disable the artificial inflation of power rates. Corral cited the alleged jacked up prices of power distribution firm Manila Electric Company (Meralco), when it bought supply from the Wholesale Electricity Spot Market (WESM).

The whopping P4.15 per kilowatt hour (kWh) power rate increase became controversial in 2014 as Meralco was forced to source its power requirements from the WESM, which is subject to volatile prices. The Supreme Court has since issued a temporary restraining order on the price hike. (READ: SC extends TRO on Meralco rate hike indefinitely)

Bulk of the rate increase was due to generation charges or the cost of producing the electricity, which generation companies collect from power distribution firm Meralco. Meralco, in turn, passes on this cost to consumers.

The power distributor had to source power from WESM due to the scheduled maintenance shutdown of its main power source, the Malampaya gas field.

Meralco also had to contend with the simultaneous outages of the power plants it had existing power supply agreements with. These outages coincided with that of Malampaya which, Meralco explained, led to the record-high increase.

Meralco was accused before the High Court of inflating charges by selling to WESM at ceiling price the power it already bought from power generation company Therma Mobile Inc.

Meralco countered that it was merely a victim of WESM's must-offer rule and of arbitrary bids that messed up pricing.

Corral told Rappler the tripartite inspection will partly address power shortages caused by the deliberate withholding of power supply by generation companies, noting the dubious simultaneous outages.

Physical inspection of the plants are a must during shutdowns to avoid reliance on mere paper work, he added.

He stressed the importance of stable power supply and low power rates in attracting foreign investors and ensuring the competitiveness of local businesses.

Tripartite inspection instead of joint assessments?

TUCP also urged tripartite inspections in the manufacturing industry to replace the current framework of joint assessments under the Labor Laws Compliance System (LLCS).

Under the LLCS, workplaces are jointly assessed by a labor law compliance officer from the labor department, a representative from among the workers in that workplace, and the employer or his or her representative.

TUCP spokesperson Alan Tanjusay said the workers' representative would necessarily be afraid to reveal any labor standards violations for fear of losing his or her job. He said the workers' representative should be a trade unionist instead, with no employer-employee relationship to the company being assessed.

In a statement Wednesday, June 24, TUCP claimed that compliance officers and labor leaders were offered bribes during the DOLE-ordered tripartite inspections in Valenzuela. Employers reportedly offered cash in an attempt to expedite the assessment and be granted a compliance certificate.

Tanjusay said the government needs to come up with an additional mechanism to deal with bribery under the LLCS.

Calls to overhaul the LLCS intensified in the aftermath of the fire that killed 72 people in the two-storey footwear factory of Kentex Manufacturing in Valenzuela City in May.

The deadly Kentex factory blaze is seen as a setback for the Philippine manufacturing industry, an industry that draws foreign investors partly due to cheap labor.

Corral argues that the way to attract investors should be through lower utility costs and upgraded skills of workers, instead of lax labor standards and low pay. – Rappler.com / Buena Bernal @buenabernal

Petilla won’t resign, vows to avert blackouts

MANILA, Philippines - Energy Secretary Carlos Jericho Petilla has shrugged off a labor coalition’s call for him to resign, saying that he is committed to avert a looming power shortage in the summer of 2015.

“I won’t allow the blackouts to happen. I will do everything to fight it out because I know I am fighting for the people,” Petilla said in an interview.

He maintained that he did not deceive anyone when he said there would be a power shortage when he proposed to invoke Section 71 of the energy law last July to allow the government to tap additional power capacity through the purchase or lease of modular generator sets.

He explained that since he made the proposal in July and revealed the projected power situation next summer, additional capacity of some 437 megawatts was tapped.

“Before July, this did not exist. There was no 437 MW,” he said.

Petilla noted that President Aquino’s declaration of a state of emergency in the power sector summoned stakeholders and the private sector to cooperate and work together in finding solutions to the looming power woes.

A Trade Union Congress of the Philippines-led group called Nagkaisa has asked Aquino to fire Petilla for “deceiving the Filipino people with his manufactured power shortage scenario hitting the entire island of Luzon early 2015.”

The group said Petilla painted a wrong picture to justify the call for emergency powers.

“Secretary Petilla took the country for a ride. He bluffed the President, the Cabinet, the senators and congressmen, the business sector, the labor and consumer groups with his tall tales of thin power reserves to justify emergency powers that entail possible purchase of multibillion-peso generator sets,” Nagkaisa said in a statement.

But Petilla maintained that the power situation in the summer of 2015 is still critical with the shortage still at 700 MW, taking into account the need for reserves of 647 MW, which is the size of Sual, the biggest plant in Luzon.

“When it comes to power, supply and reserves go hand in hand,” he said.

The additional 447 MW will come from the First Gen Corp.’s Avion plant with 100 MW by April 2015, 36 MW from the upgrading of Millennium Energy’s Limay plant to be ready by March 2015, 20 MW as a result of the rehabilitation of the Bauang plant by March 2015, 10 MW from Petron’s Bataan plant to be ready by December 2014, 60 MW from JG Summit’s Batangas plant for commissioning in January 2015 and 20 MW from the Botocan hydroelectric plant in Laguna for completion in December 2014 for a sub-total of 246 MW.

The balance is estimated to come from participants of the interruptible load program. Under the ILP, big power users would use their own power to ease pressure on the grid.

Petilla said that while this is a good development, there is no guarantee that the committed capacities would come as expected and run smoothly.

“These are all photo finish. We don’t have control over this if something goes wrong, so it is very prudent for the government to have reserves,” he added. – By Iris Gonzales (The Philippine Star) With Mayen Jaymalin

Blackouts could cost economy P23B – Aquino

IF an anticipated drop in power supply is not immediately solved and blackouts will occur next year, the cost to the economy could be as high as P23 billion, President Benigno Aquino 3rd warned on Wednesday.

Citing government estimates, Aquino said the economic cost of the feared power outages could reach a minimum of P9.3 billion to as high as P23.3 billion, excluding foregone revenues in sectors that will be affected by brownouts.

“[It depends] on the duration of the power outage. The lower figure [P9.3 billion] assumes power outage of two hours a day on average for three months. The higher figure [P23.3 billion] assumes a worse scenario of five hours a day also for three months,” the President noted during the Presidential Forum of the Foreign Correspondents Association of the Philippines.

This, he said, will likely dent the annual gross domestic product (GDP).

“The economic cost as estimated here pertains to output foregone, i.e. GDP loss from stoppage of economic activities. The estimate does not include foregone investment and tourist arrivals arising from the negative impact of the power outage on the country’s image as investment and tourist destinations,” Aquino added.

It is for these reasons, the President explained, that he had asked Congress for extra powers under the Electric Power Industry Reform Act (Epira) to address the situation on a “worst-case scenario” perspective.

“If there is no power come our summer months, there will only be one party that will be blamed, and that will be the executive. So we were asking from them various powers, not emergency, but these are really embodied already in Epira—to address the situation if and when El Niño is really severe, the forced outages in the trend that they have shown in the past two years also continue, to address also the cannot-be-postponed Malampaya shutdown, among other things,” Aquino said.

Although there are several options that the government can take, renting generators for about two years is no longer being considered because setting these up would take about six months.

The President said the Interruptible Load Program (ILP) is a “plausible substitute” but these standby generators for the most part have never been considered as baseload plants.

“What’s the difference? Standby generator, you run for a few hours. These ILP producers, in effect, will have to produce on a very regular basis, perhaps on a daily basis, if and when the reserve situation is seriously jeopardized,” he also explained.

Aquino said the Energy department balked on running the Malaya plants because they are 30 years old and it would be costly to maintain both plants.

Meanwhile, 49 labor groups and workers’ organizations called on the President to fire Energy Secretary Jericho Petilla for “deceiving the Filipino people” by manufacturing a power-shortage scenario.

The workers’ group Nagkaisa (United) was reacting to revelations during a recent congressional hearing where Energy officials admitted that the projected deficit in supply in 2015 is only about 21 to 31 MW, a far cry from the 1,200 MW shortfall trumpeted by Petilla.

“It is now very clear to us that Secretary Petilla took the country for a ride. He bluffed the President, the Cabinet and everyone with his tall tales of thin power reserves to justify emergency powers that entail possible purchase of multi-billion peso generator sets” Joshua Mata, a group convenor. said.

Another convenor, Louie Corral, executive director of Trade Union Congress of the Philippines-Nagkaisa, said the government should have acted as early as 2011 to avert a power crisis by building new power plants and exercising strong regulatory powers to prevent market fraud.

“The only time we will support emergency powers is when the government finally decides to take over the whole industry with the utmost objective of bringing down the price and securing a sustainable power supply not only for present needs but also for the next generations to come,” Corral added. - by JOEL M. SY EGCO SENIOR REPORTER AND JING VILLAMENTE REPORTER Manila Times

Labor group blames high power rate

THE Associated Labor Union-Trade Union Congress of the Philippines (ALU-TUCP) yesterday said the purchasing power of workers in Cebu and other parts of the country are greatly affected by the high cost of electricity.

ALU-TUCP education director Art Barrit said that business operations are no longer competitive due to high power rates in the country. As a result, most employers can hardly comply with the minimum wage order set by the Regional Tripartite Wages and Productivity Board (NWPC).

“Our economy is fueled by the remittances of OFW (Overseas Filipino Workers), not by FDI (foreign direct investment) which posted only $4 billion last year, whose total FDI in the Asean region registered at $120 billion,” Barrit said.

Based on their study, Barrit said the biggest budget outlay and the business operation is not the salaries in wages of the ordinary workers but on power and electricity.

“This is the reason why workers are asking Malacañang to review and revisit the Epira (Energy Power Industry Reform Act) and to have a cap on power rates,” Barrit said.

A letter dated June 17, 2014 was sent to President Benigno Aquino III through Department of Labor and Employment (Dole) Sec. Linda Dimapilis-Baldoz and Secretary to the Cabinet Rene Almendras by the Nagkaisa Labor Convenors.

“It has been 59 days today since you said you will meet us again to give your response to important various issues we raised with you and your cabinet during the nationally shown pre-labor day breakfast dialogue on April 29, 2014,” read the letter.

“With our local unions and members nationwide egging us for your feedback we would highly appreciate if you let us know if you are still inclined to meet with Nagkaisa to give your response to the issues on the table,” the letter further read.

Barrit said the labor sector has been asking Malacañang for a meeting on the power issue. Relatively, the Aquino administration is amenable to their proposals. - By Elias O. Baquero / SunStar

‘Why rent power for 2 years when it’s needed only for 3 months?’

While the House of Representatives is ready to grant emergency powers to President Benigno Aquino III to deal with a looming power crisis next year, House Majority Leader Neptali Gonzales II on Wednesday asked Malacañang to justify the necessity of releasing public funds to pay for the lease of additional generating capacity.

Renting power from an outside source is one of the options presented by the Department of Energy to Aquino and Congress to address the power crisis expected to hit the country in the summer of 2015.

“Our problem is how do we justify this rental? They say we have to rent [the additional generating capacity] for a minimum of two years but we’d only need it for three months. Will it be right to ask the people to shoulder P6 billion for additional power you’d need for only three months next year? That’s a bit steep (Medyo mabigat ata ‘yun),” Gonzales said.

Aquino has asked Congress to grant him emergency powers to contract additional generating capacity to avert a potential power crisis next year, citing as basis Section 71 or the Electric Power Crisis Provision under Republic Act 9136 or the Electric Power Industry Reform Act (EPIRA).

Oriental Mindoro Rep. Reynaldo Umali, chair of the House energy panel, said the government would spend some P6 billion to generate additional capacity for the Luzon grid since the minimum lease period for contracting companies was two years.

DOE Secretary Carlos Jericho Petilla said the government is eyeing sourcing the amount from the accumulated royalties from the Malampaya gas-to-power facility.

No price hike

Gonzales said Malacañang should specify the parameters of the emergency powers the President was seeking because it is difficult for the House to draft a joint resolution based solely on Aquino’s request.

“What we have received is a [formal] communication from the President but we don’t know what exactly he is asking for,” he said.

The Majority Leader said emergency powers that would be granted to Aquino should not result in higher electricity prices for consumers.

Gonzales said that while giving Aquino the authority to contract additional generating capacity was one of the options provided in the EPIRA for addressing a potential power shortfall, there were also other steps the government could take to increase power in the Luzon grid.

"Even without emergency powers, the government has the capacity through the DOE and ERC (Energy Regulatory Commission) to assess the situation," he said.

The Trade Union Congress of the Philippines-Nagkaisa (TUCP-Nagkaisa) has said it would support Aquino’s request for emergency powers on the condition that it would not drive up electricity rates.

“We insist that the DOE now present their tariff simulations and cost-impact scenarios to the public so we will know what to do,” said TUCP Executive Director Luis Corral said in a statement. — NB, GMA News

How much will emergency power cost electricity consumers?

What’s emergency power’s price tag?

Sen. Francis “Chiz” Escudero raised this question yesterday as he said Malacañang should be transparent enough to identify the cost taxpayers would bear if Congress approves the measure granting President Aquino emergency powers to address a looming energy crisis.

“What’s the cost to taxpayers of this measure? Even if power contracted by the government will eventually be sold to distributors, and thus the acquisition cost will be recouped, we still would like to know the costs involved,” Escudero said in a statement.

Escudero said the Executive department should come clean and disclose what additional costs consumers would carry.

“How will it be financed? Even if it’s an off-budget transaction, the government has the duty to publicly disclose the details,” the senator said.

“What is the burden of this to the consumers? Will it entail additional costs to us? If it’s through the electric bill of consumers then government should tell them in advance,” Escudero pointed out.

“We have to protect the Filipino people. We have to be careful. We have to be very careful on what type of powers we extend to them. We want to make sure what price will be. I am expecting an energy price of P15 per kilowatt hour (kwh) and this might reach P20 kwh,” said Sen. Sergio R. Osmeña III, Senate Committee on Energy.

P6-B TO ADDRESS POWER CRISIS

Oriental Mindoro Rep. Reynaldo Umali, House Committee on Energy chairman, said the government needs P6 billion to contract additional generating capacity to address the imminent power crisis in Luzon in the summer of 2015.

Umali said the P6 billion, which would likely be sourced out from Malampaya funds, would be used for the payment of the lease for a two-year period.

“If we lease it, we need a maximum amount of P1 billion per 100 megawatts per year. That’s the working figure we are looking at. So if we need to contract an additional generating capacity to address the projected 300-megawatt deficit, that would be P6 billion,” Umali told reporters during the weekly Ugnayan sa Batasan forum.

Escudero said that if the government will tap funds from the Malampaya natural gas project as fuel for the emergency powers, then it should publicly disclose how it would be done and the amount involved.

Escudero was referring to the government share with the Malampaya funds which will reach P34.5 billion next year, according to the 2015 national budget.

“If the government will tap funds from the Malampaya natural gas field as fuel for emergency powers, then it should tell us how it will be done and the amount involved,” Escudero said.

FORMAL REQUEST

In a letter dated September 12, 2014, President Aquino formally asked Congress to immediately enact the Joint Resolution that would allow his government to contract additional generating capacity to address the “imminent” power crisis in 2015.

The President’s request was signed by Executive Secretary Paquito N. Ochoa Jr.

“In accordance with Section 61 of Republic Act No. 9136, otherwise known as the ‘Electric Power Industry Reform Act of 2001,’ I hereby seek the immediate enactment of a Joint Resolution authorizing the President to establish additional generating capacity,” the President said in his letter to Congress.

“This authority is needed in order to address the imminent shortage of electric power for the summer of 2015 in Luzon,” he stressed.

But Senate President Franklin M. Drilon admitted that it would be impossible for the Upper Chamber to pass the Malacañang request before Congress goes on a three-week recess starting Sept. 26, considering the complicated issues and only four session days left.

“I think the Committee on Energy chaired by Senator Osmeña will meet Wednesday next week. Given all the complicated issues, we cannot rush this but we know the urgency. We will work on this,” Drilon added

‘CRITICAL ELECTRICITY SITUATION’

Aquino sought Congress approval in response to the Department of Energy’s (DOE) report and projection of a “critical electricity situation” in the summer of 2015 arising from, among others, the expected effects of the El Niño phenomenon, the 2015 Malampaya Turnaround, increased and continuing outages of power plants, and anticipated delays in the commissioning of committed power projects.

“There is no gainsaying that the imminent electric power shortage during these months is a real threat to the country’s growing economy and the general welfare of the people,” Aquino said.

“The speedy enactment of the Joint Resolution will ensure the energy requirements of the country for this critical period – through specific, focused and targeted acquisition of very tight energy supply,” the President added.

The President said he is looking forward to a “favorable response from both Houses.”

Umali said the House of Representatives will likely pass the resolution by October.

But before Congress grants the President’s request, Umali wants Energy Secretary Jericho Petilla to define the parameters as required under Section 61 of RA 9136.

“I asked my committee secretariat to draft a letter to Secretary Petilla to define what should be the basis for the issuance of the joint resolution…To sum it all up, what imminent power shortage are we experiencing? We need clear parameters before we craft the resolution. We may have call for a committee hearing on this,” Umali said.

Meanwhile, the Trade Union Congress of the Philippines (TUCP) urged Congress to approve the request of President Aquino for emergency power to address the looming power crisis.

TUCP Executive Director Luis Corral said this will give Aquino the leeway to implement solutions to ensure the country will have sufficient power supply. by Hannah L. Torregoza and Charissa M. Luci (With reports from Mario B. Casayuran and Samuel P. Medenilla) Manila Bulletin

Senators to Palace: Don’t rush us

ON GRANTING AQUINO EXTRA POWERS

CONGRESS is not likely to pass a joint resolution giving President Benigno Aquino 3rd special powers anytime soon because senators want to thoroughly study the matter first.

Sen. Sergio Osmena 3rd, who heads the Senate Committee on Energy, on Tuesday said the Senate will not grant extra powers to the President just because he said so or because the Department of Energy (DoE) recommended it.

“We all know what happened in 1992, so we have to be very careful about what type of powers we will extend to them,” Osmena noted, referring to the granting of special powers to then-President Fidel Ramos that led to high cost of electricity.

It was Energy Secretary Jericho Petilla, during a budget hearing of the Senate committee on finance, who informed the senators that Congress needs to pass a joint resolution giving Aquino emergency powers by the end of the month.

The President sent letters to the Senate and the House of Representatives on Monday requesting immediate enactment of the joint resolution authorizing him to establish additional generating capacity in accordance with Section 71 of the Electric Power Industry Reform Act of 2001 or the Epira law.

Section 71 of the Epira allows the President, upon determination of imminent shortage of supply of electricity and with joint approval of Congress, to search for additional generating capacity under approved terms and conditions.

Osmena said the executive should not rush Congress into enacting the resolution.

He recalled that he has been telling the Department of Energy (DOE) since 2011 about a looming power crisis but nobody listened to him.

He added that Petilla even said in May that the country will have no brownouts next year.

“Then they send a letter to us and they want it acted upon by the end of this month? No sir!” Osmena said.

The senator added that he wants the DOE to provide more details because based on his estimates, the establishment of additional generating capacity would hike power rates to P15 per kilowatt hour or even as high as P20 per kwh.

Senate President Franklin Drilon agreed that it is impossible to have the resolution approved by the end of September because the Senate has not been given the draft.

“We don’t know the parameters of the authority being requested. We know the urgency, but we can’t rush into this,” Drilon pointed out.
The Senate chief, however, gave assurances that the chamber will work as fast as it can but they cannot rush the enactment because the issue is complicated.

The Senate only has four sessions left before it goes on a three-week recess starting on September 27.

TUCP support

The Trade Union Congress of the Philippines-Nagkaisa (TUCP-Nagkaisa) also on Tuesday said it will support the grant of extra powers to the President as long as proposed solutiosn will not drive up electricity rates.

The group also called for a revamp at the Power Sector Assets and Liabilities Management Corp. (PSALM) and the Energy Regulatory Commission (ERC).

“TUCP-Nagkaisa will support the President but the solutions proposed should not punish workers and their families with an increase in power rates. We insist that the DOE now present their tariff simulations and cost-impact scenarios to the public so we will know what to do,” TUCP Executive Director Luis Corral said.

TUCP spokesman Alan Tanjusay said some of the solutions to the impending power shortage involve purchase of gas turbines and diesel-powered generation sets.

According to Tanjusay, the purchase of the turbines and sets will drive power rates up.

He accused PSALM of criminal negligence for not including in its budget the case of illegally terminated workers of the National Power Corp. - by JEFFERSON ANTIPORDA REPORTER Manila Times With JING VILLAMENTE

Noy to Congress: Give me emergency powers

President Aquino is greeted by European Council President Herman Van Rompuy

MANILA, Philippines - President Aquino has formally asked Congress for emergency powers that would enable him to address the projected electricity shortage next year.

Aquino made the request in a letter to Speaker Feliciano Belmonte Jr., a copy of which was furnished Senate President Franklin Drilon.

However, Drilon said it was impossible for the Senate to come up with the joint resolution by the end of September since Congress has only four plenary sessions left before it adjourns for a three-week break.

“We don’t even have the draft joint resolution. We don’t know the parameters of the authority being requested. We know the urgency, but we can’t rush into this,” he said.

The letter-request, dated Sept. 12, was included in the House order of business yesterday and sent to the rules committee chaired by Majority Leader Neptali Gonzales II.

“In accordance with Section 71 of Republic Act 9136, otherwise known as the Electric Power Industry Reform Act of 2001, I hereby seek the immediate enactment of a joint resolution authorizing the President to establish additional generating capacity,” Aquino said in his request.

He informed Belmonte and Drilon that the Department of Energy predicts a “critical electricity situation” in the summer of 2015 due to, among other factors, the expected effects of the El Niño phenomenon and delays in the start of operation of “committed power projects.”

“There is no gainsaying that the imminent electric power shortage during these months is a real threat to the country’s growing economy and the general welfare of the people.

“The speedy enactment of the joint resolution will ensure the energy requirements of the country for this critical period – through a specific, focused and targeted acquisition of additional generating capacities for use during the limited periods of time of very tight energy supply,” the President said.

“This authority is needed in order to address the imminent shortage of electric power for the summer of 2015 in Luzon. I look forward to a favorable response from both houses (of Congress),” he added.

Gonzales said they are reviewing the draft bill before referring it to the committee on energy. “We will attend to the President’s request with dispatch,” he said.

Cannot be rushed

Drilon said the Senate would work on the measure “as fast as we can,” but could not be rushed to approve it.

“I think the committee on energy chaired by Senator (Sergio) Osmeña will meet on Wednesday next week. Given all the complicated issues, we cannot rush into this but we know the urgency. We will work on this,” he said.

During the hearing on the proposed 2015 budget of the DOE yesterday, Drilon said the President’s letter was too “broad” and did not contain the parameters for the authority being requested from Congress.

Osmeña also echoed Drilon’s statement that the authority could not be granted to the President by the end of the month.

“I’ve been telling them we’ll have a shortage since 2011 and then now this is going to be my fault? It’s not accurate for them to depend on Senate approval before the end of September,” he said.

He said the Senate has a duty to protect the people from the possible adverse impacts of the grant of emergency powers to the President.

He cited the experience during the Ramos administration when several independent power producers were contracted to address the power crisis with a take or pay guarantee. This led to an overcapacity and the National Power Corp. accumulating a massive debt.

Cost to taxpayers

Sen. Francis Escudero said he wants to find out how much the government would incur and its cost to taxpayers.

“What’s the cost to taxpayers of this measure? Even if power contracted by the government will eventually be sold to distributors, and thus the acquisition cost will be recouped, we still would like to know the costs involved,” said Escudero, chairman of the Senate finance committee.

“How will it be financed? Even if it’s an off-budget transaction, the government has the duty to publicly disclose the details,” he added.

Only solution

Energy Secretary Carlos Jericho Petilla said he had raised the issue since July and would continue to push for the establishment of additional generation capacity as “the only solution… at this point.”

While there are other solutions for the expected power shortage next summer, he said there are no guarantees that these would materialize, and might even be more expensive.

Among the options is the Interruptible Load Program (ILP), which involves distribution utilities such as the Manila Electric Co. and electric cooperatives asking their big load customers to address their power requirements by using their own generator sets.

Petilla said private sector response to the ILP has been “dismal” and there is no guarantee it would materialize and address the power shortage.

He said the old Malaya geothermal power plant in Rizal, also among the options, has to be rehabilitated to be utilized.

Given the uncertainties with the other options, Petilla said contracting with power suppliers is presently the only real solution.

Suppliers’ requirement

He said the end-September deadline for the contracting of additional power was based on the requirement of the suppliers of a six-month period to be able to guarantee the necessary load.

“It’s absolute as far as the supplier is concerned,” he said.

With Congress saying that it cannot come out with the joint resolution this month, Petilla said he could settle for a supplier who could provide power requirements of the country in three months.

“But it will be expensive… I don’t think there is anybody who can supply in three months,” he said.

“There are alternatives but the question is, are we willing to pay for it. There are many alternatives, but our problem is time and cost constraints. What we have to consider is if we’re willing to have brownouts. It all depends on what we want,” he added.

Go slow

Militant party-list representatives and other members of the House minority bloc, however, cautioned Congress to go slow in the grant of emergency powers to avoid the anomalies that took place during the Ramos administration.

“We should not commit those mistakes again, like entering into a take-or-pay arrangement, which allows an investor to be fully paid for his generating capacity, whether that is used or not. We should pity the consumer, who will ultimately pay for our mistakes,” Isabela Rep. Rodolfo Albano III, a member of the minority, said.

He said Congress should impose strict parameters for the exercise of emergency powers.

He said Petilla should tell lawmakers his agency’s plans to increase generating capacity in Luzon for the middle of next year.

“Are they buying generators or are they renting? What do they exactly want to do? What are the details? Secretary Petilla should tell us because he will be the one who will be in charge of implementation. As of now, we are groping in the dark, we are guessing. ” he said.

Albano said Petilla should also verify his department’s data on “generating capacity, dependable capacity and demand” to clear up confusion.

“If his own figures for 2013 were to be believed, we even have excess electricity available in Luzon,” he said.

He cited the figures released by his minority colleague, Bayan Muna Rep. Neri Colmenares, and supplied by the DOE, that installed capacity for the Luzon grid is 12,790 megawatts, while dependable capacity is 11,469 MW.

The peak demand for the grid is just 8,700 MW, with Meralco using 6,121 MW.

“If these figures are correct, we will have enough electricity in Luzon next year, when a shortage is projected. Unless they are wrong,” Albano said.

TUCP backs bill

The Trade Union Congress of the Philippines (TUCP) expressed support for the grant of emergency powers for the President, but said he must also ensure that it will not lead to power rate hikes.

“We insist that the Department of Energy now present their tariff simulations and cost-impact scenarios to the public so we will know what to do,” TUCP executive director Luis Corral said.

The TUCP said the DOE’s proposals, such as gas turbines and diesel-powered generation sets, could lead to higher power rates.

“We have already advised DOE to do tariff simulations first because the power crisis cannot just be defined as a lack of power supply, it is also about uncompetitive power rates,” the DOE said in a statement.

“It is the consumers who are being punished for the failure to inspect defective meters in 125 distribution utilities by the ERC. And now the power industry wants to add to their profit by creating a power shortage which will allow them to charge more,” the TUCP statement added.

Doable plans

Militant labor group Partido ng Manggagawa (PM) called on Congress to ask the President to present doable plans to solve the looming power crisis before granting him emergency powers.

PM spokesman Wilson Fortaleza warned that palliative solutions to the power crisis would only bring more problems.

He said the Aquino government should be blamed for the power crisis for doing nothing since warnings were raised as early as 2010.

Fortaleza said lawmakers should also declare the EPIRA and privatization a failure and audit all the plants’ capacities before granting emergency powers to the President. – By Jess Diaz (The Philippine Star) With Mayen Jaymalin, Marvin Sy, Artemio Dumlao

Congress asked to pass extra power reso

PRESIDENT Benigno Aquino III has asked Congress to pass a joint resolution authorizing him to enter into contracts to add generating capacity to the Luzon grid to avert a looming power crisis in 2015.

In a letter to House Speaker Feliciano Belmonte Jr. and Senate President Franklin Drilon dated Sept. 12, Aquino acknowledged that the imminent power shortage during the first quarter of next year as “a real threat to the country’s growing economy and the general welfare of the people.”

Aquino stressed the need for the House and the Senate to move for the speedy enactment of the joint resolution that “will ensure the energy requirements of the country for this critical period – through a specific, focused and targeted acquisition of additional generating capacities for use during the limited periods of time of very tight energy supply.”

In seeking the authority from Congress, President Aquino invoked Section 71 – the Electric Power Crisis Provision – of Republic Act 9136 or the Electric Power Industry Reform Act (EPIRA).

“This authority is needed to address the imminent shortage of electric power for the summer of 2015 in Luzon,” Aquino said.

Section 71 states that the President, upon determination of an imminent shortage of supply of electricity, may ask Congress for authority, through a joint resolution, to establish additional generating capacity under such terms and conditions as it may approve.

The President’s letter noted that the Department of Energy had projected “a critical electricity situation in the summer of 2015” due to the expected effects of the El Niño phenomenon, the turnaround of the Malampaya gas-to-power facility, the increased and continuing outages of power plants, and the anticipated delays in the commissioning of new power projects.

The resolution to be submitted by the Palace is aimed at averting a looming power crisis in Luzon when the Malampaya gas field shuts down for a month from March 15 to April 15 with a shortfall of at least 300 megawatts.

Belmonte said he already referred the President’s request to the House committee on energy chaired by Oriental Mindoro Rep. Reynaldo Umali.

Umali had earlier vowed “to work very hard” to secure the passage of a resolution that will grant President Benigno Aquino III emergency powers to prevent blackouts next year.

But Senator Sergio Osmeña III, chairman of the Senate committee on energy, said the Palace request would have to be studied very carefully, even as he chided the administration for ignoring his warnings since 2011 of a coming power shortage.

He said Energy Secretary Carlos Jericho Petilla was even going around telling people not to believe him because there would be no blackouts in 2015.

“Now they send us a letter and want action by the end of the month? No sir! I have to protect the Filipino people,” Osmeña said.

“We won’t give him emergency powers just like that. We know what happened in 1992, right?” he added, referring to the negotiated power deals by the Ramos administration that resulted in high energy costs.

“We have to be very careful about what type of powers we will extend to them. Number two, we want to make sure that the people know what the price will be. And I am expecting the price will be as high as P15 per kilowatt-hour, or even 20/kwh.”

Drilon said he received the letter from the President Monday, but also said it would be impossible to have the joint resolution by the end of September.

“That is impossible because we don’t even have the draft joint resolution. We don’t know the parameters of the authority being requested. We know the urgency, but we can’t rush into this. We will work on as fast as we can,” Drilon said.

“I think the Committee on Energy chaired by Senator Osmena will meet on Wednesday next week. Given all the complicated issues, we cannot rush into this but we know the urgency. We will work on this,” he added. “I don’t want to bind Senator Osmeña and his committee. They will examine this.”

Senator Francis Escudero urged the Palace to be transparent about how much contracted energy would cost, and how the Malampaya funds would be used if the President is granted emergency powers.

“A powerful light must shine on these contracts in the interest of transparency and to prevent a repeat of the country’s experience during the energy crunch of 1990s when power contracted later burdened consumers,” Escudero said.

In a speech in Quezon province last week, President Aquino announced he was seeking a joint congressional resolution which would authorize the government to order additional generating capacity of around 600 megawatts.

The generating capacity would be cut into two: 300 megawatts to meet the projected base-load deficit and 300 megawatts as buffer or equivalent to 4 percent of peak demand.

Energy officials forecast an energy shortage in Luzon at 400 MW to 1,000 MW during the first half of 2015.

Leyte Rep. Ferdinand Martin Romualdez, who heads the independent minority bloc in the House, cautioned his colleagues against granting the President emergency powers.

“This is a very serious matter that Congress should address with caution. The concerned government officials should back the necessity of giving emergency powers to the President,” Romualdez said.

The Trade Union Congress of the Philippines-Nagkaisa said it supported the granting of emergency powers, but warned that these should not result in higher electricity costs.

“TUCP-Nagkaisa will support the President but the solutions proposed should not punish workers and their families with an increase in power rates. We insist that the Department of Energy now present their tariff simulations and cost-impact scenarios to the public so we will know what to do,” said TUCP Executive Director Luis Corral. – by Maricel Cruz, Joel E. Zurbano, Vito Barcelo - Manila Standard Today

TUCP calls for ERC, Napocor revamp

MANILA, Philippines - Labor group Trade Union Congress of the Philippines (TUCP)- Nagkaisa on Tuesday expressed support for the granting of emergency powers to President Benigno Aquino III to address the power crisis.

The group's support entails the condition that the proposed solution will not drive up electricity rates and that there be a revamp of both the Power Sector Assets and Liabilities Management Corporation (PSALM) and the Energy Regulatory Commission (ERC).

“TUCP-Nagkaisa will support the president but the solutions proposed should not punish workers and their families with an increase in power rates. We insist that the Department of Energy (DOE) now present their tariff simulations and cost-impact scenarios to the public so we will know what to do,” TUCP executive director Luis Corral.

TUCP-Nagkaisa accused PSALM of criminal negligence for not including in its budget for operations the pending case of the illegally terminated workers of the National Power Corporation.

The recent Commission on Audit report on both the financial and operational audit of the ERC showed it has failed to inspect 125 distribution utilities as to possible metering violations, allowing an overcharging of the bills of millions of customers.

“We will no longer tolerate the intellectual dishonesty and corruption in the DOE, the ERC and PSALM. Workers and their families will no longer be the whipping boys to increase the corporate profits of the power industry up. Workers need also their fair share now,” Corral said.

He noted that while it is difficult to obtain a wage adjustment in Congress and the regional wage boards, it is so easy for the power sector to obtain an increase in their power rates before the ERC.

“The ERC even allows Meralco (Manila Electric Company) to charge its customers for future expenditures and projected operational costs, three years into the future. In effect, the consumer is made to advance for the capital expenditures of Meralco," Corral said.

The TUCP-Nagkaisa decried the failure of the PSALM to factor in the case of the illegally terminated NPC employees.

“Under their Operational Management Agreement, PSALM is in charge of maintaining the assets to answer for the stranded costs of NPC. The biggest elephant in the room was the pending Supreme Court case involving the workers of the NPC. It was the biggest item that would have to be paid,” TUCP-Nagkaisa spokesperson Alan Tanjusay said.

He said the TUCP-Nagkaisa expressed alarm that some of the solutions listed by the DOE are gas turbines and diesel-powered generation sets.

“This will drive the power rates up. We have already advised DOE to do tariff simulations first because the power crisis cannot just be defined as a lack of power supply, it is also about uncompetitive power rates. Ordinary workers and their families are the ones being punished by for the lack of forwards planning of DOE,” Tanjusay said. - By Dennis Carcamo (philstar.com)

With no solution in sight, power crisis will spillover 2016 - TUCP

QUEZON CITY – Without an acceptable and genuine national strategy addressing the forthcoming energy crisis in 2015, the Trade Union Congress of the Philippines (TUCP) is seeing more brownouts to happen in 2016.

TUCP warned that the real extent of the problem will kick in 2016 and beyond if the current Department of Energy (DOE) secretary resort to quick fix and expensive band aid solutions such as renting power barges and generator sets, gas turbines and effect the Interruptible Load Program (ILP) – a program by the DOE allowing malls to run their generator sets with consumers paying for their maintenance and operation costs.

Under these schemes, TUCP insists the generating companies and their distribution utility will merrily do their supply and demand games while continuously burdening consumers with high power rates and more brownouts. The implications for workers who will be laid off, for jobs that will never be created, for imperiled businessmen, and for the poor consumers are disaster.

“We are alarmed at the silence of the government to directly and genuinely address the power crisis. The silence of Secretary Petilla is deafening. After his ‘emergency powers’ call was made, he is now backpedalling and trying to portray the problem as less than it is. Either he is the ‘boy who cried wolf’ or simply trying to place a band-aid fix because he was unable to make a case for surgery to the president, he clearly has not grasped the true extent of the problem,” said TUCP executive director Louie Corral.

Corral warned that the ILP program is just a stopgap measure. He said Meralco customers will now be financially obligated to cover the costs for Messrs. Sy and Gokongwei running their mall generators for their own use on the theory that by freeing Meralco to keep the lights on in other areas that these oligarchs are doing consumers a favor.

“We are going to end up subsidizing their malls. But the 2015 power deficit is just the tip of the iceberg. The failure of both the DOE to address the policy gap now makes it inevitable that the crisis will repeat itself in 2016 and onwards,” Corral emphasized.

The major policy gap is that government does not incentivize the entry of additional and cheaper power capacity if it continues to allow Meralco to enter ‘sweetheart’ bilateral contracts from their preferred suppliers which will always mean low reserves to ensure high power rates.

To bring in genuine competition and additional supply, TUCP is proposing that there is enough leeway in EPIRA for DOE to mandate that henceforth all the distribution utilities such as the market-dominant Meralco, controlling 74%of the Luzon market, to source their power supply every 3 years from international public bidding held under the supervision of the DOE and ERC.

TUCP suspects Meralco is again behind the power crisis. Meralco allegedly hostaged its consumers to their Redondo coal plant supplier in Subic. When the 600 MW coal plant was stymied by the Supreme Court issuance of Writ of Kalikasan and the objections of environmental groups, Meralco could have chosen 2 to 3 years ago to take their supply from AES Masinloc which also wanted to set up 600 MW plant or even from GN Power in Quezon. Instead they insisted on Redondo.

With 74% of the market share in Luzon, Meralco is proverbial ‘only game in town’ and if they chose any other source, this would have prevented the power shortfall for 2015. “Our call is therefore to clip this self-serving option of their subject the choice of who will supply them to international public bidding under DOE supervision,” he added.

- Samar News

More brownouts in next 2 years -TUCP

Energy Secretary Carlos Jericho Petilla said rotational brownouts especially in Luzon may continue in 2015 due to electricity shortage. Photo shows dark Manila streets where power was affected following Typhoon Glenda earlier this year. AP/Aaron Favila

MANILA, Philippines — Labor group Trade Union Congress of the Philippines on Monday said it foresees more brownouts for the next two years without a concrete national strategy by the government to address a looming energy crisis.

The group said the real extent of the energy problem will kick in 2016 and beyond if Department of Energy (DOE) secretary Jericho Petilla will resort to quick fixes and expensive band-aid solutions.

Such short-term solutions the group cited as ineffective are renting power barges and generator sets, gas turbines and effect the Interruptible Load Program, or ILP.

The ILP by the DOE will allow malls to run their generator sets with consumers paying for their maintenance and operation costs.

Under these schemes, TUCP said the generating companies and their distribution utility will merrily do their supply and demand games while continuously burdening consumers with high power rates and more brownouts.

"The silence of Secretary Petilla is deafening. After his 'emergency powers' call was made, he is now backpedalling and trying to portray the problem as less than it is. Either he is the 'boy who cried wolf' or simply trying to place a band-aid fix because he was unable to make a case for surgery to the president, he clearly has not grasped the true extent of the problem," TUCP executive director Louie Corral said.

Corral warned that the ILP program is just a stopgap measure, noting that Meralco customers will now be financially obligated to cover the costs for mall owners running their generators for their own use.

It runs on the theory that by freeing Meralco to keep the lights on in other areas, businesses are doing consumers a favor, he explained.

"We are going to end up subsidizing their malls. But the 2015 power deficit is just the tip of the iceberg. The failure of both the DOE to address the policy gap now makes it inevitable that the crisis will repeat itself in 2016 and onwards," Corral said.

TUCP said the major policy gap is that government does not incentivize the entry of additional and cheaper power capacity if it continues to allow Meralco to enter 'sweetheart' bilateral contracts from their preferred suppliers which will always mean low reserves to ensure high power rates.

To bring in genuine competition and additional supply, TUCP proposes to allow enough leeway in the Electric Power Industry Reform Act for DOE to mandate all the distribution utilities such as the market-dominant Meralco to source their power supply every three years through international public bidding under the DOE and ERC.

"Our call is therefore to clip this self-serving option of their subject the choice of who will supply them to international public bidding under DOE supervision," Corral said.

By Dennis Carcamo (philstar.com)

Power crisis may shut down businesses, TUCP fears

AS the power situation in Luzon remains tight, the Trade Union Congress of the Philippines (TUCP) warned that the power crisis may force businesses to shut down.

The group is scheduled to meet on Wednesday with various business and labor groups to draw up measures amid adverse ramifications of the energy problem on employment and business stability.

“We have no national strategy to address the looming power crisis. So, the TUCP, other labor groups, consumer and business organizations will meet on Wednesday with the aim of figuring out a recommendation to the government on how to minimize the impact of a full-blown power crisis precluded by prolonged rotational brownouts currently prevailing in many key areas Luzon and in Mindanao,” TUCP Executive Director Louie Corral said on Monday.

The TUCP “wants the government to be prepared when the perfect storm caused by lack of power policy hits the country because it’s the workers who’ll be whipped hard when the storm comes,” Corral added.

Even before Typhoon Glenda hit the country last week, he said, his group had urged Energy Secretary Jericho Petilla to declare a national emergency on power “so that collectively we can come up with the right solutions.”

Petilla recommended the declaration to Malacanang on Monday.
“The fate of all industry roadmaps, particularly the employment targets, is dependent on how we address the power crisis right now.

We need a truthful picture of our future power supply so that we can come up with clear strategies and coping mechanisms and avert companies shutting down and retrenchments of workers. A flawed power industry roadmap will be fatal to the economy. We cannot afford to hinge on the day-to-day weather predicament the fate of the employment of millions of workers,” Corral said.

“Without sufficient and affordable power, there will be no investors and there will be no new jobs,” he added.

The TUCP urged the government to temporarily return to power generation business “until there is sufficient supply to restore business confidence, a return to tariff-setting based on 12 percent cap return-on-rate-base (RORB) to bring down the electricity prices to make the country regionally competitive.”

The group noted that the Philippines has one of the highest electricity rates in the world, which makes the country unattractive to new investments that create quality jobs. This, it said, resulted in static unemployment of 3.046 million in April 2013 and 2.924 million in April 2014.

If the rotating brownouts being imposed by the Manila Electric Co. (Meralco) continues, the TUCP said it is possible that thousands of employees may lose their jobs.

Meralco also on Monday said electricity would have been fully restored in Metro Manila on Sunday but that some areas in nearby provinces will continue to be without power because distribution lines damaged by Typhoon Glenda had not been fixed.

Joe Zaldarriaga, Meralco spokesman, said the company has doubled efforts to restore power in their franchise area.

Also as of Monday, 4.99 percent of the distribution utility’s franchise still had no electricity.

“We hope to close the gap [for Metro Manila] within today. For the franchise area, we cannot say, but we have an internal deadline,” Zaldarriaga told reporters.

He said they are fixing transmission lines in the provinces of Laguna, Cavite, Batangas and Quezon but that it will take time to fully restore power in these provinces.

“These are isolated areas [where] we lost supply because we still have to re-string the lines and fix our transformers after they were devastated by the typhoon,” Zaldarriaga added.

Petilla said the power deficit has narrowed down after the 250-megawatt unit of Santa Rita plant kicked in. The energy situation is expected to improve when four power plants will start feeding the Luzon grid within the week.

These plants are San Lorenzo, Pagbilao 1 and 2, Calaca and BacMan. - Manila Times

TUCP to gather labor groups amid current 'power' situation

MANILA, Philippines - Alarmed by the current power situation in some parts of the country following the onslaught of Typhoon "Glenda," the Trade Union Congress of the Philippines said Monday that it will meet with various business and labor groups this week to draw up measures to address the problem.

TUCP executive director Louie Corral said the Aquino administration has yet to come up with solution to the current energy situation.

Several provinces and areas in Metro Manila have been experiencing power outages after the typhoon crossed Luzon last week.

“TUCP, other labor groups, consumer and business organizations will meet on Wednesday with the aim of figuring out a recommendation to the government on how to minimize the impact of a full-blown power crisis precluded by prolonged rotational brownouts currently prevailing in many key areas Luzon and in Mindanao," Corral said.

He added: "TUCP wants the government to be prepared when the ‘perfect storm,’ caused by lack of power policy, hits the country because it’s the workers who’ll be whipped hard when the storm comes."

The group said that with one of the highest electricity rates in the world, the country remains unattractive to new investments that create quality jobs resulting to a static unemployment of 3.046 million in April 2013 to 2.924 million in April 2014 while underemployed are 11.057 million and 11.501 million covering the same period.

With the rotational brownouts in the equation, the TUCP also fears many jobs might be retrenched with companies affected by inadequate power supply.

The TUCP and its labor coalition called Nagkaisa has recommended twice to President Benigno Aquino III during the previous Labor day dialogue since 2013 the creation of a multi-agency, multi-sectoral presidential task force headed by him and composed of the economic and infrastructure clusters of the cabinet, business chambers, labor, consumer and power industry players.

The aim of the task force is to address the insufficiency of power and the need to determine affordability and competitiveness of power rates in the country.

Based on the recommendation, Energy Secretary Jericho Petilla last May issued an order creating a study group under the DOE.

The TUCP and the Nagkaisa, however, refused to participate saying that they were asking for a presidential task force, not a study group.

Before the onset of rotational brownouts in Metro Manila, Corral said the TUCP urged Petilla to declare a national emergency on power "so that collectively we come up with the right solutions."

“The fate of all industry roadmaps particularly the employment targets is dependent on how we address the power crisis right now. We need a truthful picture of our future power supply so that we can come up with clear strategies and coping mechanisms and avert companies shutting down and retrenchments of workers," Corral said.

The TUCP is recommending that the government temporarily return to the power generation business until there is sufficient supply to restore business confidence, a return to tariff-setting based on 12 percent cap return-on-rate-base (RORB) to bring down the electricity prices to make the country reghionally competitive.

The group also suggests the suspension of Wholesale Electricity Spot Market in favor of bilateral contracting between generators and distributors overseen through a public auction by DOE and Energy Regulatory Commission to ensure true costs and not speculative and “gaming” costs. - Philstar

Workers, businessmen unite in hope to find answers to power woes

IN A rare opportunity, employers and employees find common ground in finding the urgency to address the emerging power crisis in the country.

In a statement, the Trade Union Congress of the Philippines (TUCP) said that business and labor groups are set to meet on Wednesday to discuss the power crisis in the country.

"We have no national strategy to address the looming power crisis. So, the TUCP, other labor groups, consumer and business organizations will meet on Wednesday with the aim of figuring out a recommendation to the government on how to minimize the impact of a full-blown power crisis," said TUCP executive director Louie Corral.

He said the two sectors often fighting over labor issues deemed it necessary for them to be united in helping the government find an effective solution to the power crisis.

"The fate of all industry roadmaps particularly the employment targets is dependent on how we address the power crisis right now. A flawed power industry roadmap will be fatal to the economy. We cannot afford to hinge on the day-to-day weather predicament the fate of the employment of millions of workers," said Corral.

To recall, labor groups have already asked President Benigno Aquino III as early as last year to head a multi-agency, multi-sectoral presidential task force composed of the economic and infrastructure clusters of the cabinet, business chambers, labor, consumer and power industry players with the aim to address the power woes of the country.

Energy Secretary Jericho Petilla had responded last May by creating a study group under the Department of Energy (DOE), instead, said the TUCP.

Labor groups refused to participate, saying what they asked for is a presidential task force and not a study group.

TUCP spokesman Alan Tanjusay said they are wary that the rotational brownouts could ultimately result to severe job losses across the country.

"With the rotational brownouts in the equation, TUCP fears many jobs might be retrenched with companies affected by inadequate power supply," said Tanjusay in a phone interview.

He noted how the Department of Labor and Employment (Dole) had recorded last year about 40,000 people losing their jobs under normal circumstances, or due to slump in demand and high cost of production.

"If the government does not come up with the right strategy to address the problem, the numbers could easily increase dramatically to almost double," said Tanjusay. (HDT/Sunnex)

TUCP Slams DOE Sec. Petilla for Inutility on Brownouts

The Trade Union Congress of the Philippines (TUCP) chided Energy Secretary Petilla for his being inability to address brownouts and increasing electricity rates.

The group, instead, proposes a declaration of national emergency on power so that the country will cease being a victim of the vicious cycle.

TUCP described the “red alert” status issued by the Department of Energy, warning as to insufficient supply this weekend as the tip of the iceberg.

“Our ship-of-state is sailing full speed ahead, in a collision course with the twin -peak iceberg of lack of power and MERALCO’s never-ending price increases. The DOE is placing our economic take-off at risk and is setting the stage for an impending economic meltdown,” said TUCP Executive Director Luis Corral.

“The TUCP requests that the DOE Secretary to call a spade a spade and advice President Aquino that there is now an emergency in the power sector, requiring a multi-agency response with clear directions from the President, “said Corral.

The labor center in a two-hour audience with President Aquino this April 30 requested the President to declare an emergency and establish a multi-agency group under him to address the power crisis. The DOE instead set up a task force study group which the TUCP and labor coalition Nagkaisa..

Corral laid the responsibility with the DOE for not laying down clear policy parameters and accompanying strategies to ensure secure power supply or to define competitive rates.

“The DOE doesn’t have these two items which can be technically defined by engineers, financial analysts and industry practitioners. In the absence of crisis leadership, electric power policy is veering from one Supreme Court case, still unresolved, to a new Supreme Court case, from ERC caps on a supposedly free-market activity to a more complex two price-cap mechanism and now to a pitiful DOE Task Force on Power Rates whose arcane and complex debates are further obscuring one central fact: That power Philippine Power Policy is in this climate of drift is firmly in the hands of a socially irresponsible and financially greedy power generation sector,” he explained.

In the midst of this, consumers are supposed to rely on the oversight of an Energy Regulatory Commission headed by the Napoles-challenged Zeny Ducut,” said TUCP spokesperson Alan Tanjusay.

“While there is a lack of secure and reliable supply, government should step in to put up additional capacity. If bilateral contracts between power distributors and generators will better lower rates and approximate true costs, then suspend the WESM until a technically developed percentage of supply reserve is set up to engender real competition. If there is cheap hydropower available during the rainy season, then run it instead of keeping it as ancillary reserve while the more expensive coal and oil plants are run,” Tanjusay said..

He said this can be done without need of amending EPIRA,” All it takes is Presidential courage to announce an emergency and the need for a national response. Then all the players can be prodded, cajoled and otherwise mobilized to restore sanity to the electricity industry."

The TUCP also called for an end to “blue skies” wishful thinking that somehow the DOE target to increase solar from 50 Megawatts to 500 Megawatts, will ease the burden of the supply deficit.

Solar has at best an efficiency capacity at best of 20%, 500 MW really means 100 MW and that will never be large enough or reliable enough to be base load for large industries. Also, this will be done with a feed-in-tariff that will jack up rates by an average of 18 centavos per kWh for the next 20 years.

"Solar seems to be the flavor of the month, Two years ago the flavor was privatizing the power barges and last year it was pushing generation sets. In Mindanao DOE could have rehabilitated the Agus Pulangui hydro-electric complex as demanded by Mindanawons, they did not , so the UP experts are predicting 200 plus days of brownouts for Mindanao next year. In the meantime the DOE rushed implementation of the Retail Competition and Open Access program which we fear will further drive up rates for the captive residential households of MERALCO,” Corral added.

TUCP attributes the deflated 5.9% GDP growth rate in the first quarter as being driven by insecurity of businesses in our power supply. TUCP also attributed the inflation rate of 4.7% in May, the highest in 30 months, on the spiraling cost of power. They said energy officials preen with confidence about the manageability of our power crisis and yet we are made to pay for their failure of political leadership.

The labor group said the country is hit by the triple whammy of spiraling costs of goods and commodities, an interruptible load program that allows Robinson's and SM to power up their generators to energize the lights and air-conditioning of their malls when there are NCR brownouts and be able to charge it to MERALCO customers, and now the real threat of retrenchments because businesses are losing because of no power and high power costs.

TUCP has warned that the ASEAN Integration come 2015 requires a clear energy roadmap. "A wrong-headed energy roadmap will be fatal to all other industry roadmaps. If there is no power, there will be no investors and there will be no jobs," Tanjusay said.- Bohol Standard

Labor group urges ERC to order full stop in rate hike

Workers want a full stop, not a mere recalculation of spot market prices which triggered sharp spikes in the December 2013 and January 2014 billing of Meralco. 

 

It is also demanding for the suspension of operations of the electricity spot market.

 

Groups belonging to the country’s biggest labor coalition Nagkaisa made these calls during a picket held outside the offices of the Energy Regulatory Commission (ERC) this morning, two days after the Commission issued an order voiding the applied rate hike of Meralco. 

 

“It would be pointless to invoke the State’s police powers if the ERC cannot impose a full stop to all rate hike petitions, including that of Meralco and other distribution utilities in Luzon that were affected by ‘market failure’ during the maintenance shutdown of Malampaya gas platform between November and December last year,” declared the group in a statement.

 

Based on the findings of ERC, WESM prices during that period would not qualify as “reasonable”, “rational”, and “competitive”, thus it ordered the Philippine Electricity Market Corporation (PEMC) to do a recalculation of such prices. 

 

But initially the Commission has already found evidence of market abuse by way of physical and economic withholding of capacities by several plants that led to the tightening of supply during the said period. 

 

Nagkaisa, however, was cautious about a recalculation that may simply result to reduction in rates rather than the full prohibition of the amount applied, which in the case of Meralco totalled P4.15/kWh in December and P5.33/kWh in January. 

 

The group added that any collections made by Meralco reflecting such unjust prices must be refunded to the consumers.

 

“Let we remind the ERC of the principle that unjust prices resulting from market failure cannot be passed on to or borne by the consumers,” said the group. 

 

Workers had been accusing the ERC of ‘regulatory capture’ during the last 12 of years of EPIRA implementation.  It also played dead on many reports pertaining to market abuse in the spot market.  No wonder it suffered downright condemnation when it approved the Meralco rate hike of P4.15/kWh last December. 

 

According to the group, the ERC is fully aware that the WESM itself is a failure since it began operating in 2006.  By concept it is supposed to be at WESM where we can buy the cheapest electricity since the product is sold here at marginal cost of declared excess capacities of power plants. 

 

In July 2006 the inaugural price at WESM was P2.00/kWh.  During the Malampaya shutdown between November and December last year prices at WESM breached the maximum cap of P62.00/kWh. 

 

“There is no reason therefore to perpetuate this farce,” concluded Nagkaisa.

Revoke Meralco Franchise, Pull the Plug on EPIRA

Meralco has failed the Filipino people. They promised cheap, widespread access to electricity, yet the only thing they mustered thus far are scandalous electricity rates that they expected ordinary Filipinos to meekly comply with.

Meralco has consistently regarded ordinary Filipino consumers with the heartless, corporate greed for profit. The most recent spike in power rates proved this. Meralco made the absurd argument that it is not responsible for the record-high electricity rates simply because it had no power over the forced outages their power suppliers implemented. It became even more ridiculous when Meralco played the victim by claiming that it had no choice but to source power from the Wholesale Electricity Spot Market (WESM) for the power deficit.



Nothing could be farther away from the truth. Documents submitted to the Supreme Court showed that it was Meralco’s order to power supplier Therma Mobile, which it controls, to bid at the maximum allowable price of P62.00 per kilowatt hour no less than 25 times during that period that was responsible for the skyhigh clearing price at the WESM. In short, Meralco gamed the market to benefit itself and other power producers. By doing so it defrauded its consumers whom it is obligated to supply electricity at the least possible cost.

We belie Meralco’s claims that it was powerless over the simultaneous forced outages of its power producers. The shutdown of Malampaya for maintenance, and the shutdown of two other power plants for the same reason, were all scheduled. Meralco saw it coming, and they took the most convenient and profitable course of action. They chose to sit back, game the power industry, and make consumers pay for it all.

That Meralco systematically abused the Filipino people is but a symptom of the failure of the Electric Power Industry Reform Act (EPIRA). We must not forget that EPIRA is the main source of the problem; it put the whole industry under the gang rule of private power – from generation to transmission sectors, all the way to the cooperatives in the distribution sector. Privatization of the power industry has resulted in monopoly control, inefficient power delivery and sky-high prices, in direct contradiction to the promises EPIRA made to attain efficiency and break the monopoly in the electricity industry, and lower power prices.

That Meralco’s profits have risen over 100 per cent since EPIRA went into effect in 2001, and that Meralco has the power to game the market at the expense of the people is a monstrous example of EPIRA’s failure.
13 years of Meralco’s greed and EPIRA’s exploitation of power consumers have pushed the people to a deeper level of destitution. To this, we raise our voice and declare that this abusive relations is over. We call on the government to heed the people’s call: it is high time the government revokes Meralco’s mega-franchise and pulls the plug on EPIRA.

Oppose Meralco's Threat to Trigger Brownouts if TRO is not Lifted! Revoke Meralco's License and Repeal EPIRA!

Meralco, the electricity monopoly, threatened its 5.3 million consumers with brownouts if the temporary restraining order (TRO) on its scandalous 4.5 peso per kilowatt hour is not lifted.

The threat was made by Meralco lawyer Victor Lazatin during the Supreme Court hearings on the rate hike on Feb. 4.

Consumers will not tolerate this blackmail.

On the pretext of losing vast amounts of money, this monopoly, which made 17 billion pesos in profits in 2013, is trying to derail the investigation of its role in the suspicious series of events that led to the rate increase. Meralco has put the blame on seven of its power suppliers that went offline when the Malampaya natural gas plant underwent maintenance from Nov. 11 to Dec. 10, 2013, allegedly forcing Meralco to go to the Wholesale Electricity Spot Market (WESM) for its power deficit. But documents submitted to the Supreme Court showed that it was Meralco’s order to a power supplier--Therma Mobile—that it controls to bid at the maximum allowable price of 62 pesos per kilowatt hour no less than 25 times during that period that was responsible for the skyhigh clearing price at WESM.

Meralco gamed the market, to the detriment of its consumers whom it is obligated to supply at the least possible cost. Moreover, Meralco would not have resorted to buying at WESM’s inflated prices had it made provisions for reserve power from its suppliers in the event of a foreseeable event like the Malampaya shutdown. As President Aquino himself has said, ““There is periodic maintenance [of Malampaya] required. That’s a foreseeable event. If you know what producers of fuel will not be able to produce, then you have to find a substitute. So preparation should have been made for foreseeable events.”

But the problem goes beyond Meralco. It goes beyond the Energy Regulatory Commission, which is the classic example of a regulator that is in the pocket of the regulated. It goes beyond the Department of Energy, which has shown itself to be completely incompetent in planning for the energy needs of the country. The main source of the problem lies in the Electric Power Industry Reform Act (EPIRA), which has placed power generation, transmission, and distribution completely in the hands of the private sector.

Privatization has resulted in monopoly control, inefficient power delivery, and sky-high prices, not in more efficiency, less concentration, and lower prices. Meralco, whose profits have risen over 100 per cent since EPIRA went into effect in 2001, is a monstrous example of EPIRA’s failure.

13 years of exploiting consumers is enough! We demand the revocation of Meralco’s license and the repeal of EPIRA.

Workers call for reformatting of the power industry

The power industry needs not just a reboot but a major reformatting to better serve the country’s current and future energy needs and to satisfy the people’s clamour for affordable and sustainable power.

 

This, according to the labor coalition Nagkaisa, should be the new frame in seeking amendments or replacement to the failed Electric Power Industry Reform Act or EPIRA.

 

The group made this challenge as some of its leaders attended the Department of Energy’s (DoE) consultations on EPIRA amendments while its members called for the law’s scrapping in a demonstration held outside the Legends Hotel in Mandaluyong City. 

 

“A bad law like EPIRA may need some amendments to address the current mess.  But a wrong policy such as wholesale privatization can only be addressed by replacing it with a new one, a better one,” stated Josua Mata, one of the convenors of Nagkaisa.

 

Mata, who is also the secretary general SENTRO, told the DoE that workers will engage the amendment process in Congress and at the same time work for its replacement when such is probable amid the incurability of EPIRA and the viability of other options.

 

Another convenor, Louie Corral of the Trade Union Congress of the Philippines (TUCP), said amendments are necessary on issues of cross-ownership; the generation being a ‘non-public’ utility, reforms in the ERC (composition and rate-setting methodology); privatization of the transmission system and the Agus-Pulangi hydro complexes in Mindanao; retail competition and open access; and on electric cooperatives, among others.

 

It can be recalled that in a petition letter submitted to President Aquino during the Labor Day celebration of 2012, Nagkaisa raised the following issues to the Executive, some of these require legislative actions:

 

1. Removal of oil and power from EVAT coverage;

2. Stopping the indexation of/or pegging the prices of natural gas and geothermal steam to international prices of oil and coal;

3. Stopping the ERC’s implementation of Performance Based Rate (PBR) methodology as this allows power firms to increase rates in anticipation of future expansion and other capital expenditures; and,

4. Reforming the Energy Regulatory Commission (ERC).

 

The group also bats for the re-nationalization of the transmission lines and the permanent stay in the planned privatization of the Agus-Pulangi.

 

Partido ng Manggagawa spokesperson, Wilson Fortaleza, another convenor said the country and the people will not accept another 13 years of failed rule under EPIRA.

 

“It’s time to rethink and come up with a new model of public power that is completely different from what the industry is, before and under EPIRA. Fortunately we are blessed with so much national potential to do that.  It is only the government that thinks it can’t be done without the prescribed track imposed by the ADB and World Bank,” said Fortaleza.