2 lawmakers want government takeover of ‘gensets’ to address power shortage

Rufus Rodriguez. INQUIRER.net FILE PHOTO

MANILA, Philippines—Two Mindanao lawmakers wanted to invoke the Constitutional right of government to take over the generator sets of businesses to address the looming power crisis in 2015.

In a resolution, Cagayan De Oro Representative Rufus Rodriguez and his brother Abante Mindanao Rep. Maximo Rodriguez Jr. said they are invoking Section 17, Article XII of the Constitution which states that “in terms of national emergency… the State may, during the emergency and under reasonable terms prescribed by it, temporarily take over or direct the operation of any privately-owned public utility or business affected with public interest.”

Rodriguez said he wants government to take over these businesses’ generator sets that are capable of producing at least 1 megawatt (MW) of power each from February to May 2015.

“One possible solution to the power crisis is for the government to invoke Article 12 (National Economy and Patrimony), Section 17 of the 1987 Constitution and temporarily take over or direct the operation of any privately-owned public utility or business affected with public interest,” they said.

This power will be entrusted to the Energy Secretary, according to the resolution.

The solons in the resolution cited the expected power shortage in Luzon in 2015, as well as the thin power supply in Mindanao that results in rotating brownouts.

They said that businesses, which will be taken over will be compensated for the costs of diesel fuel, rentals and salaries of the genset operators.

In an interview, Cagayan de Oro Representative Rodriguez said taking over the gensets will be cheaper at P2 billion compared to the purchase and rental of gensets that are estimated to cost at P9 billion and P6 billion, respectively.

Meanwhile, House energy committee chair Oriental Mindoro Rep. Reynaldo Umali deemed the proposal “too extreme.”

But Rodriguez denied proposing an extreme solution.

“The alternative (to the takeover) is more extreme—renting foreign suppliers to put their generator sets here, and we’ll pay P6 billion. (The takeover) is more advantageous because we’ll have lesser expenses, and we’ll be able to make use of existing gensets,” he said.

The solons wanted a government takeover amid refusal of some businesses to commit to the Interruptible Load Program (ILP).

Under the ILP, big industrial and commercial customers who have the ability to produce their own electricity through generating sets should cut off or reduce their supplied electricity, particularly during peak periods of the day, and instead use their own generator sets.

This is to give way for the other customers who may need the power than the commercial users. The businesses are also required to contribute their excess energy reserves.

President Benigno Aquino III has asked Congress to grant him the authority to contract additional capacity precisely to address the looming power shortage during the summer, as granted to him under the Electric Power Industry Reform Act (Epira).

Epira allows emergency powers to the President “upon the determination by the President of the Philippines of an imminent shortage of the supply of electricity.”

“Congress may authorize, through a joint resolution, the establishment of additional generating capacity under such terms and conditions as it may approve,” Section 71 of the law reads.

Energy Secretary Carlos Jericho Petilla had said the agency is expecting a 600 to 800 MW shortage for Luzon in 2015, and that the President must contract at least 300 MW of the total shortage.

The agency had said the thinning power supply may be due to the looming El Nino phenomenon, the maintenance shutdown of the Malampaya power plan, increased or continuing outages of power plants, and the delay in commissioning of committed power projects.

The energy department had told the committee that at least P9 billion will be needed to purchase gensets and P6 billion to rent gensets.

The department had also set the following deadlines for the signing of the contracts in the following options – October 31, 2014 for the purchase and lease, December 19, 2014 for the voluntary ILP, and February 28, 2015 for the mandatory ILP.

Petilla said he was hoping the ILP would contribute as much as 700 MW of the shortage.

He also said the ILP is only voluntary and they could not compel businesses to participate.

Instead of immediately granting Aquino’s request, the leadership in the House of Representatives sought an inquiry in aid of legislation on the need to contract additional power.

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