Aquino’s energy sector legacy: what happened, what didn’t | Inquirer Business

Aquino’s energy sector legacy: what happened, what didn’t

FOR THE energy and power sector, it seems the Aquino administration’s legacy was not so much about what was done but what did not happen.

About halfway through the administration’s term, in 2013, international oil prices stabilized and eventually started showing signs of weakening. A full blown price free fall then took place in 2014, and worries of oil smuggling through some parts of the country abated.

Although there has been a recovery this year, crude prices at around $50 a barrel are still far below the $110 per barrel level recorded at the start of 2014.


Electricity prices became more controversial, particularly at the end of 2013, and the heated discussion on rates spilled over to 2014.


Power rates in December 2013 and January 2014 billing months surged when rates prices at the Wholesale Electricity Spot Market spiked from the 30-day maintenance shutdown of the Malampaya gas project in late 2013 and the simultaneous shutdown of various power plants around that time. In response, the Energy Regulatory Commission (ERC) imposed additional price caps in the energy spot market and investigated market players.

Thirteen power plant companies, including those owned or led by big industry players, face complaints of anti-competitive behavior before the ERC. The ERC investigating unit said in a report that 13 energy generation companies or power stations withheld energy capacity during a period of tight electricity supply in 2013. This contributed to a record spike in power rates in late 2013. However, the probers’ report did not directly say whether there was collusion among the players—something which was widely expected to be tackled.

The ERC has said a ruling may be made this year but thus far, no major developments on the hearing of the case has been disclosed by the regulator.

In terms of power projects, a number of those starting within the Aquino administration were in fact signed or started in the previous administrations, such as the 600-megawatt coal fired project of Redondo Peninsula Energy Inc. consortium in Subic, Zambales, toward full capacity. The project of the consortium comprising Aboitiz Power Corp., Taiwan Cogeneration Corp., and Meralco PowerGen Corp. (the energy arm of the Manila Electric Co.), in fact, pushed through only after overcoming many hurdles.

Former Energy Secretary Carlos Jericho Petilla managed to get all stakeholders (power plant operators, power distributors, consumers) to help prevent a power crisis in Luzon in the summer of 2015, while outgoing Secretary Zenaida Monsada managed to prevent outages during the election season this year.

Also during these periods, the Meralco-led Interruptible Load Program or ILP was created to get volunteer firms to use their own generators for own-power-use during peak times and ease the demand on the power grid when there is a lack of power supply.


There is still a tight power situation looming on the horizon, at least for the rest of 2016. The Department of Energy (DOE) assures, however, that it has things under control.

Despite all these challenges, there were a number of milestones during this administration’s term, most notable the surge in renewable energy (R.E.) investments because of the race for Feed in Tariff (FIT) incentives.

It was also under this administration’s term that the dispute between Korean firm Kepco and the state-owned Manila Waterworks and Sewerage System over the Angat hydroelectric complex was resolved and Kepco’s partnership with San Miguel Corp. formalized.

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Also during this administration, energy regulators required competitive bidding for the contracting of power supply by distribution utilities such as Manila Electric Co. (Meralco), in an effort to prevent them from limiting contracts to strategic allies and affiliates.

TAGS: Aquino administration, Business, economy, Energy, News

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