House drafts joint resolution authorizing PNoy to tap private gensets

Energy Secretary Carlos Jericho Petilla has recommended granting emergency powers to Aquino to lease or purchase modular generator sets to address the projected supply deficit in Luzon next year.

 

The DOE version of the joint resolution allows the President to enter into negotiated contracts “for the acquisition of additional generation capacity which may include the construction, repair, rehabilitation, improvement or maintenance of existing power plants projects and facilities or its rental.”

 

Buying generators is seen to cost P9 billion, while leasing carries a P6 billion price tag. 

 

Shouldered by government?

 

House Energy panel chair Rep. Reynaldo Umali said the cost of compensating companies under the ILP is seen to go down with the DOE’s projection that brownouts will only occur one hour every week for a total of 16 weeks next summer.

 

Based on Umali’s estimates, the government will have to shell out P80 million a month to pay back ILP participants, down from P200 million as quoted by the Manila Electric Company (Meralco) per 300 MW of committed interruptible load capacity from private gensets.

 

This means the government may have to spend P400 million to reimburse ILP participants during the five months when private generators may be tapped.

 

The passage of a joint resolution is necessary, so that the cost of reimbursing ILP participants will not be passed on to consumers, Umali said. 

 

“It’s our position that consumers shouldn’t be burdened [with additional costs]. If we don’t pass the joint resolution, the cost of subsidy will be passed on to consumers because that’s what the law says. If we issue the joint resolution, there’s a possibility… the subsidy [will come from the government],” he said.

 

The lawmaker, however, said the decision on whether the subsidies will be shouldered by the government or passed on to consumers is “up to Congress and the President.”

 

Voluntary sign-up

 

Under the draft joint resolution, private entities with self-generating capacities (SGFs) are encouraged to sign up voluntarily in the ILP on or before December 1 to qualify for reimbursement by the government for fuel and other costs. The compensation shall not be subject to value-added tax.

 

Businesses that do not register under the ILP will not receive compensation should their generators be de-loaded from the grid once reserves fall to critical levels.

 

The House version of the joint resolution also authorizes all government offices and institutions to retrofit their offices and buildings with, among others, energy LED bulbs, air-conditioning units with inverters and solar energy systems, subject to emergency procurement procedures.

 

Umali has moved the target date for the approval of the joint resolution from October 29 to December 1, since the DOE has expressed openness to adopting ILP to solve projected power deficit next summer. – VS, GMA News