Gov’t may need to rent power generators

DOE Secretary Jericho Petilla. AP FILE PHOTO

Time is running out for the government to make use of the opportunity to shore up power-generating capacity to avert brownouts in summer of 2015 and it seems that the only option now is to rent generators, according to Energy Secretary Carlos Jericho L. Petilla.

In a forum attended by businessmen and consumers Tuesday at the Hotel Rembrandt in Quezon City, Petilla renewed Malacañang’s call for Congress to allow the government to do so as provided in Section 71 of the power reform law.

In attendance in the forum were about 100 representatives of the Philippine Chamber of Commerce and Industry, Federation of Philippine Industries, Employers’ Confederation of the Philippines and 16 consumer organizations that included labor groups.

The Electric Power Industry Reform Act, enacted in 2001, disengages the government from the business of power generation and required the privatization of state-owned power plants and other assets.

However, Section 71 of the law states that when the President determines an imminent power supply shortage, Congress may authorize “the establishment of additional generating capacity under such terms and conditions as it may approve.”

President Aquino has done so earlier this month—citing a projected energy deficit of 300 MW to 1,000 MW in summer 2015—and the matter is pending in the legislature.

“Prospective suppliers had set a ‘deadline’ of Sept. 30, which was originally Aug. 31,” Petilla said.

The energy chief said it would take six months to put up the generating sets and bring them online.

“We are considering, through PSALM (state-run Power Sector Assets and Liabilities Management Corp.), to rent or buy as much as 600 megawatts in generation capacity,” Petilla said.

He explained that the figure would cover at least 400 MW of supply shortfall as well as buffer capacity called “regulating reserve.”

Petilla added that the prospective contractors were experienced suppliers that provided electricity in Japan’s Fukushima prefecture, the area that was plunged into darkness following the earthquake and resulting tsunami that hit the northeastern part of that country in 2011.

He said the contractors also provided power during the Beijing Olympics in 2008 as well as in Angola where there was a supply shortage.

“We have a shortfall and the options that we have are to buy or rent generating sets,” Petilla said. “Either way we need Congress to push for this.”

He said renting generating sets with capacity of 600 MW would cost P6 billion for two years—the minimum contract duration that suppliers offer—while buying the same would cost P10 billion.