'Amend law to allow govt to build power plants'

The Philippine government should be allowed to build power plants — and thereby increase the country's electricity supplies — by amending a law intended to spur competition in the power industry. This was proposed by Jesus Tamang, the Energy Department's director for energy planning and policy bureau, who sought to amend Section 47 (j) of the Electric Power Industry Reform Act (EPIRA). The law prohibits state-owned National Power Corp. (Napocor), the Philippines' largest power producer, from building power plants or from purchasing power capacity from the private sector. If it weren't for that provision, the government could have easily thwart power shortages by setting up plants since the shortage has been predicted as early as 2004, Tamang told GMANews.TV after the seminar on averting power shortage At the Asian Institute of Management (AIM) last Thursday. "They said that in the absence of the private sector, the government should be able to provide the services. But the government, through Napocor, is prevented from doing that. That will have to be changed. That will have to be adjusted," he said. Tamang is one of the reactors invited for the event organized by the Center for Philippine Futuristics. Enacted on June 8 2001, EPIRA's primary objectives include developing indigenous energy alternatives, lowering the high cost of electric power in the country, and encouraging private and foreign investment. (See: Short-circuited EPIRA: Power rates up 100% for Filipino households) It was supposed to deregulate the power industry by placing at least 70 percent of Napocor's power plants in private hands. This privatization, which is being handled by the Power Sector Assets and Liabilities Management Corporation (PSALM), is among the preconditions for EPIRA’s envisioned open access and retail competition. Under open access, consumers will be allowed to choose their own electricity suppliers. “You should understand that the law was made at [a different] time. It may be true and perfect at the time it was signed [but] through time we see the need for additional requirement [and that there is a] provision in the Epira that can’t be met," Tamang said. Congress should establish guidelines when to allow govt to produce power “Lack of private investments" in the country’s energy sector also makes it difficult to meet the increasing power demand, said Napocor's vice president for corporate services Urbano Mendiola Jr. Among difficulties cited by Mendiola include the timing and reasonableness of approvals, issues in securing permits and clearances, resistance of communities to accept power projects, credit-worthiness of off-takers (entities buying power), and the country’s peace and order situation. In this light, he suggested that Congress should come up with a guideline on when to invoke EPIRA's section 71. Under the provision, the President, upon determining that there is an electricity shortage, can allow, with the authority of Congress, "the establishment of additional generating capacity under such terms and conditions as it may approve." This was the same provision invoked by President Gloria Macapagal-Arroyo to address the power shortage in Mindanao. Urbano, the main speaker in the event, said that while the chief executive has the power to use the provision, there was no clear definition on what “imminent shortage" really is and when is the best time to invoke it. Next administration should have clear solutions to solve power crisis Mendiola stressed the need to resolve the power crisis by installing new plants to meet the demand side which continuously increases. By 2030, he said, the country would be facing a shortage of roughly 12,000 megawatts if the situation is not addressed. “The demand side continues to increase but we have no new investment to supply it," he said. Tamang also called on the public to vote for a president and a set of lawmakers who have clear solutions on how to resolve the energy crisis. “Energy is one of the many issues that the next president would have to deal with. Definitely, the Energy sector would raise the issues to be on top of the agenda. If you’re making a selection for senators and congressmen, check on who would have a good platform what they intend to do in the energy sector to help us," Tamang said. - RJAB Jr., GMANews.TV