Poor DOE

By David Celestra Tan

When power costs skyrocket the power players blame DOE. When there is shortage of power supply they also blame DOE. Meralco and their allies in the legislature are masters in blaming everyone else except themselves. DOE can’t do anything right and it is not totally their fault.  The Epira law gave them policy responsibilities but not enough enforcement teeth.

By this time the government must realize that power supply and costs is a public service and the government is expected by the people to step up when the private sector fail.

In the face of a projected 200mw shortage of power in Luzon in the summer of 2015, it is the government frantically trying to look for a solution. Unfortunately, under the current structure, any solution by the DOE will be paid for the PSALM who will then pass it on to the consumers through the Universal Charge.

Where is Meralco in the search for solution? Well they say, if you want additional power please approve our negotiated projects in Redondo and Pagbilao and Mauban.  But really, it is the job of Meralco to deliver sufficient power at least cost to its consumers. There is where the rub is. They want the government to approve their self-negotiated contracts and forget about the prices. Another power crisis ploy. Are we hearing the consumers say “hostage”.

Meralco is the distributor for power and they are the contracting party in the bilateral contracts. It is their obligation to look for a solution.  Is Meralco saying that among its IPP’s and PSA’s whose installed capacities total more than 6,500mw, they cannot squeeze 200mw out of them for the summer of 2015 through better scheduling of downtimes for maintenance?

The DOE is bravely trying to deal with the problem but taking on the responsibility but at the expense of the consumers. They propose to rent 500mw of temporary generators at a cost of P2 billion a year plus aeroderivative fuel and who knows what other charges.

In his presentation, Sec. Petilla said of the 3,000mw of emergency generators of large users, only 115mw are willing to participate in an interruptible load program.  And it was Meralco saying it. C’mon, are we saying if the power is cut off to these large users during shortages, they will not turn on their emergency generators for 3 or 4 hours? If that happens it costs them P16 per kwh. That’s what their generators are for anyway.  If they participate in a summer program, and Meralco helps with P4.00 per kwh, it would only cost them P12 per kwh. Hell, Meralco was willing to pay WESM P33 per kwh! And large establishments will feel proud of themselves to have done a patriotic duty. Maybe the rules are not good enough.

Sec. Petilla says the only way to create a  fast solution is for the President PNoy to declare a state of emergency. We cannot blame people being concerned that this can lead to more abusive and expensive contracts.

Meralco and its IPP’s must be chuckling all the way to the bank, with Sec. Petilla trying to run around looking for a solution at government costs when it is really the job of Meralco. Why doesn’t DOE and ERC conduct a downtime audit and contractual performance of these IPP’s before they stick the people with the huge costs of renting 500mw of generators.

Where is the 650mw Malaya power plant in all these? PSALM pays the O&M contractor P500 million a year to keep it ready as a reserve power plant. Is this essentially a security guard agreement? Is there a performance standard for all that money being paid them? Can we not squeeze an additional 200mw in its dependable capacity for the four months from February to May 2015? Even if it costs P300 million in additional refurbishing, it is still cheaper than the P2 billion a year for the proposed 500mw rental generators. Why not turn this over to NPC and keep the plant in shape for the long term?

It is time to revisit Section 71 and amend it to give the government the right to maintain strategic power reserve. Limit them to say 10% or approximately 650mw in the Meralco area. Section 71 is a product of those private power groups salivating over the privatization of Napocor’s power generation assets. And they have succeeded. But still the government cannot escape being made responsible by the people for shortages of supply for power is really a public service.  So might as well have rules to establish and empower the needed rules. This is a good time for President Pnoy to step up to work for honest to goodness amendments to the Epira law specially this Section.

We have seen enough what happens when everything is left with the private sector. Not this strategic service like energy and power that are so vital to the country and its people.

Why doesn’t the ERC pass the resolution now mandating the holding of competitive bidding for bilateral power supply contracts? Let us get the Presidential emergency powers to force Meralco to subject its needs to competitive bidding including this supposed 200mw power shortage in the summer of 2015.

Poor DOE.

By the way,  has anyone heard what is happening in Mindanao? Have they assured that they will no longer have a brownout from Feb to May 2015?

Matuwid na Singil sa Kuryente Consumer Alliance Inc.

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