AC Energy Holdings wants next administration to balance interest of consumers, private biz

by Lenie Lectura – January 18, 2016

from Business Mirror

AC Energy Holdings Inc., the power arm of conglomerate Ayala Corp., wants the next administration to “carefully chart a plan” for the energy sector in order to achieve all objectives intended to balance the interest of both consumers and private business.

“The momentum is already there,” AC Energy President John Eric Francia said, referring to the private sector’s investment appetite in power projects.

AC Energy has now assembled over 700 megawatts (MW) of attributable capacity, putting the company closer toward achieving its target of assembling over 1,000 MW from power plants by 2016.

Francia said the country needs a well-crafted action plan to address transmission problems and come up with the right energy mix, among others.

“It’s going beyond the statement of goals. I mean really thinking of very concrete policies that will drive the attainment of those. It has to do with pushing for gas and renewable energy [RE]. I am not saying we should stop on coal because that’s a market-driven thing. But I think the government must really emphasize and go beyond the least-cost mentality and really look at the long-term benefits,” Francia said when asked what his aspirations are for the next administration. The majority of the country’s power producers build coal-fired power plants because they are the most affordable power source. Gas-fired power plants and power facilities that run on RE are more expensive. But RE developers believe that the benefits of RE outweigh the cost implications associated with it.

Francia also seeks for “transparency and coordination” across different sectors in crafting an action plan that would lead to full implementation of an open-access and competitive selection process.

On escalating transmission right-of-way (ROW) problems, Francia hopes that the Right-of-Way Act pending before the House of Representatives would be enacted into law.

House Bill 5588 aims to simplify the mode of acquiring the ROW for government projects.

“The good news is that the government is trying to do something to update our laws, to make sure that ROW acquisitions would be more expedient. In the past, when a transmission tower gets bombed, the NGCP [National Grid Corp. of the Philippines] will just go there and fix it in a few days.… If the government can’t go beyond paying the zonal value of the land, then why bother negotiating?” Francia said.

AC Energy and its partners in various power projects, said Francia, did experience ROW problems, no different from the Ayala Group’s firms that are into road and infrastructure projects.

“There are challenges. It’s not easy to acquire ROW, but we’re able to do it,” he said. “I hope the NGCP will be able to resolve its ROW problems.”

Aboitiz Power Corp. CEO Erramon I. Aboitiz said in an interview that transmission problems “add complexity” to the problems encountered by power producers. “We already encounter problems when putting up power projects, such as permitting and others. It’s a shame that we also have to encounter transmission problems. For how can a power plant deliver its power to the consumers if there’s no transmission line? We really need the support and coordination of all industry stakeholders, particularly the government.”

Earlier, Manila Electric Co. (Meralco) Chairman Manuel V. Pangilinan said allowing the private sector to invest in critical infrastructure is something the government should take note of amid robust economic growth.

Meralco, as well as other conglomerates like San Miguel Corp. and the SM group, experienced delays in the current administration’s approval or project implementation processes.

The six-year term of President Benigno Aquino III ends soon, with only a few months left before the national election is held in May.

“We always batted for more power plants because we create pricing pressure,” Pangilinan said in an earlier interview. “If the power plants are new then they are more efficient and better for the country. You could then retire old, creaky, expensive coal-fired plants. We should do just that. Allow the private sector to invest. It’s their money, it’s their risk. There’s no government funding involved, there’s no guarantees involved. So let them, subject of course to environmental constraint and proper permitting.” Lenie Lectura

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