DOE chief open to amendments to Epira

Energy Secretary Carlos Jericho Petilla is open to changing some provisions of the Electric Power Industry Reform Act (Epira) to allow the government more avenues for intervention during unusual situations, such as the recent spike in generation costs and the lingering power crisis in Mindanao.

Petilla said the abolition of Epira, as proposed by some groups, was “too drastic.” It could be more helpful and more feasible to propose changes, he said through a filing in Congress.

The concept for the proposed changes, Petilla said, was borne out of the tendency of power supply to track but not exceed demand as generation firms need returns on their hefty investments. The desirable result is affordable but reliable and secure electricity supply while ensuring a healthy business climate that will spur more power investments, he said.

The recent controversy over the record P4.15/kWh in power generation and related charges set to be passed on by the Manila Electric Co. (Meralco) to consumers in stages had militant groups calling for a repeal of Epira. Even the head of the House committee on energy, Oriental Mindoro Rep. Reynaldo Umali, acknowledged that the thought held appeal because, “At least then, we had somebody to blame—Napocor (National Power Corp.).”

Regarding the power crisis in Mindanao, Petilla said he had asked the Asian Development Bank (ADB) to review the Epira on whether the government could retain some power generating facilities for use during emergencies.

“What can we do to help? Nothing. We are asking ADB to study proposed changes in the Epira and then that’s when we (will) draft the bill that we want to pass on to Congress,” Petilla said.

Petilla said an option that could be considered was for the government to build power assets but not count them as capacity. “Every now and then we have gaps in energy supply as demand grows faster than estimates. We can run our assets during times of curtailment or shortage, just for one to two hours per day for six months. When commercial plants go online, we shut the government assets down.”

Much of the country’s energy woes are said to be due to demand forecasting rather than the private sector’s capability to build new power facilities. Two years ago, the government approved power projects based on a 6-percent growth forecast on the economy. The Philippines is now growing at a faster than expected pace and is set to meet its 7-percent growth target in 2013 despite recent earthquakes and typhoons.

“We need the plants now but a standard one will take three to four years to build,” Petilla noted.