Govt eyes Malampaya to fund measures addressing power crisis

by Lenie Lectura, February 8, 2015
from BusinessMirror

THE government mulls tapping the Malampaya fund to finance the costs to be incurred by the measures meant to address the looming power crisis.

A Senate version of a joint resolution said a “Special Fund” authorized funding source of extraordinary expenses arising from the implementation of the resolution seeking to grant President Benigno Aquino III additional power to establish additional generating capacity. The “Special Fund” was created under Section 8 of Presidential Decree 910.

Earlier, the House of Representatives approved on third and final reading the House Joint Resolution 21 granting Mr. Aquino additional powers to address the possible power crisis.

Aside from the Interruptible Load Program (ILP), the Malampaya fund is also being eyed to finance the ‘extraordinary expenses’ to be incurred by the Power Sector Assets and Liabilities Management Corp. (Psalm) from the increased pumping operations of the Caliraya-Botocan-Kalayaan Pump Storage Power Plant (CBKPSPP) units in Laguna. Likewise, the fund is being eyed to fund the differential costs  of diesel and natural gas fuel for the Ilijan combined cycle power plant and the fuel supply and expansion of fuel storage of the Malaya thermal power plant.

The Senate urged the Department of Energy (DOE) to declare all CBKPSPP units as must load units from 8:00 p.m. to 8:00 a.m. from Monday to Saturdays and Sundays, if and when requested by Psalm, and as ‘must-run’ units during peak period hours to achieve the desired water elevation of the Caliraya Lake and optimize the existing output of the said units.

The National Power Corp. (NPC) will also incur expenses for “displacement compensation” to affected households and resort owners within the Caliraya Lake for actual damages incurred as a result of raising the water elevation of the lake.

The national government has earlier raised the idea of sourcing ILP expenses from the Malampaya fund.

The ILP seeks to encourage heavy users of electricity to run their own generator sets during peak demand periods instead of getting their supply from the Luzon grid. The electricity that would not be taken from the grid would be available to household and small users, preventing a rotating blackout.

The Senate, in its version of the joint resolution, said there will be payment to customers which are allowed an option to recover their de-loading compensation from the government as maybe provided in the ILP rules.

There will be compensation to entities enjoying discounted generation, transmission and distribution rates for the incremental increase in electricity rates arising from recovery of the de-loading compensation.

When sought for comment, Energy Secretary Carlos Jerico Petilla said around P0.5 billion will be sourced from the Malampaya fund.

“My estimate is P500 million. Only the incremental part and not the whole ILP amount will be shouldered by consumers. It depends on the market clearing price as to how much consumers will shell out,” said Petilla.

As of August 2013, Malamapaya funds amounted to P130 billion.

The Aquino administration, Petilla said, so far used P15 billion of the governments share from the Malampaya project, which totaled P165 billion since the project commenced in 2001.

The previous administration, meanwhile, used up almost P20 billion of this amount, according to Petilla.

The government used the funds for the fuel requirements of the NPC-Small Power Utilities Group, for thePantawid Pasada fuel subsidy program for public utility vehicles and for the cost incurred when it took delivery of a Navy ship donated by the US government.

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