DOE chief hopes to lower power rates under his term

by Madelaine B. Miraflor – July 4, 2016

from Manila Bulletin

Consumers can hope for lower power rates under the administration of President Rodrigo Duterte as the new Department of Energy (DOE) chief had sworn to “work very hard” to make the energy sector not only reliable but also affordable during his term.

As the new energy chief who doesn’t have any background in the power sector, Alfonso Cusi said he’ll look at the industry from the perspective of a consumer and as one, he understands the need for lower power rates and must find solution to it.

This, upon recognizing the fact that the Philippines charges the second highest power rates in Asia, next to Japan, and ninth in the world.

“It is our desire and I would like to make it possible. And we will work hard for it,” Cusi said in an interview with reporters after his turnover ceremony on Monday.

“There is nothing definite yet,” he added. “That requires a lot of studies… we are going to look at the universal charges, transmission charges, distribution charges.”Asked if he’s going to work on towards an increased government subsidy, he only said “we are looking for ways” as to how he’ll make the lower power rates possible.

Then he said he will try to address all key issues in the industries, including the way the agency processes documents and applications, what is the ideal energy mix for the country, the Malampaya depletion, and the conflicting call to get rid of coal-fired power plants and cheap power rates.

Cusi said while it is important for the country to further build on its renewable energy portfolio, it still needs to keep its coal plants and support the ones that’s going to be built in the future for steady rates and supply.

“We will find the right mix [of energy sources]… But unless we can develop hybrid or other reliable sources, coal is more reliable source for now. We can’t just discount coal,” the energy chief said.

“We have to find that balance, not everything should be renewable. For example, I’m not against solar but what happens at night time? We have to find a happy balance,” he added.

Meanwhile, Cusi will also address the depletion of Malampaya gas production field, whether or not he is still willing to extend the contract of the consortium who are drilling within the area beyond 2024.

Malampaya supplies fuel to three of the biggest power plants in Luzon, powering almost half of the region’s households.

The DOE earlier said that the total volume of natural gas in Malampaya may only be able to run a 400 megawatt (MW) power plant until 2024. By that time, the current service contract for Malampaya is already about to end.

“That issue requires a very long discussion. The area will run out of gas so what is there to extend? But personally, I’m open to [discussions] about it,” Cusi said.

As for giving out permits within DOE, Cusi said he’ll try to make the agency as fast and as reliable as it can be.

“I tasked everybody [within DOE] to review their process in dealing with the public. Our permitting has to be transparent, predictable and with definite timeline,” Cusi said.

Cusi is known for leading Civil Aviation Authority of the Philippines (CAAP) and Manila International Airport Authority (MIAA) during the term of President Gloria Macapagal Arroyo.