MANILA, Philippines–The government needs to be careful in implementing various stopgap measures to avert a power supply crunch next year if it hopes to avoid burdening the public with higher power rates, according to the Philippine Chamber of Commerce and Industry, the largest business organization in the country.
The solution must be one where the resulting power rate increase will cost the least and, preferably, the rates may only be hiked “during the period when the anticipated shortfall will occur,” the PCCI stressed.
The chamber on Thursday issued the statement in reaction to President Aquino’s decision to invoke Section 71 of the Electric Power Industry Reform Act (Epira), which would give the state the authority to carry out necessary measures to address an “imminent” power shortage.
Through this authority, the state-run Power Sector Assets and Liabilities Management Corp. (PSALM) will be able to contract at least 300 megawatts (MW) of additional capacities to avert an impending power supply crunch of about 600 MW by the summer of next year.
“Since what we are addressing here is a situation that may or may not happen, and if it does happen we are not quite certain of the magnitude, the situation or event [should be] perceived as ‘temporary’ … [requiring] stopgap remedies,” the group noted.
The government must first ensure that the consumers will not be greatly affected if it decides to subsidize the power it hopes to contract from private power generation firms. PCCI also stressed the need to tap a qualified or seasoned distribution utility (DU) from which the government could contract the required capacity for a limited period.
PCCI suggested Meralco for being the largest distribution utility in the country.
Also, the chamber is continuing its push for the full implementation of the interruptible load program (ILP), as PCCI considers it to be the most cost-effective and workable palliative measure.
“There are over 2,000 MW of standby generators registered with the Energy Regulatory Commission. To be safe and assured, only about 600 MW is needed to adequately respond to … a supply shortfall. PCCI estimates that, by using 400 MW for five hours a day … [at] say P45 per liter, the resulting power cost increase is only in the vicinity of 90 centavos per kilowatt-hour for a month. There may be no need for subsidy,” the PCCI said.
Under the ILP, participating customers would allow distribution utilities to either cut off or reduce the electricity being supplied to them, particularly during peak periods of the day. During these hours, “deloaded” customers are expected to use their own power generating sets. Later, these customers will be compensated.