Imee: Power Outages Can’t Be Allowed To Mar Economy’s Reopening

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Senator Imee Marcos has warned that power outages in the short to long term will trip the country’s economic recovery if the Department of Energy (DOE) and National Grid Corporation of the Philippines (NGCP) waste time pointing fingers than finding solutions.

“The DOE and NGCP should quit this blame game. As quarantines are eased, curfews are lifted, and vaccination is ramped up, businesses will be resuming operations for longer hours that demand more electricity. We also expect face-to-face classes and regular rail transport to gradually resume,” Marcos said.

“Our reopening economy will not withstand prolonged blackouts, as those that occurred in the early 90’s because energy solutions were ignored,” Marcos added.

The Senate economic affairs committee chairman cited that power outages may continue this June and in coming months due to the ongoing preventive maintenance of power plants and the lack of new contracts for added energy capacity.

Marcos also pointed out that the power-generating capacity of the Malampaya gas field, which supplies 30% of Luzon’s energy needs, is expected to run out in 2024.

“Is the NGCP trying to reduce costs by not contracting reserves, is there no power to contract, or are investors hesitating to build the necessary merchant plants because they do not expect to be contracted?” Marcos asked.

Although the DOE has promised to investigate if industry players deliberately caused the recent power shortages, Marcos said that “collusion would be difficult to prove under present guidelines.”

Among the legislative solutions that Marcos has proposed is to amend Republic Act 10667, or the Philippine Competition Law.

“This will allow the Energy Regulatory Commission (ERC) and Philippine Competition Commission to better manage what ERC chief Agnes Devanadera called “pricing play” in the Wholesale Electricity Spot Market (WESM),” Marcos said.

Marcos explained that the WESM’s secondary price cap, which is meant to protect consumers from the manipulation of electricity prices by power generation companies, “has been hit more than 400 times this year, compared to only three times in 2019.”

“Another solution is to redefine power reserves, which at present is set at 4% of peak demand. This may need to be raised to help the system cope with increasing power supply demand and prevent more blackouts,” Marcos added.

Marcos also called for the swift passage of an amended Foreign Investment Act when Senate sessions resume in late July, “which could lead to the exploration of urgent alternative to Malampaya, including green energy and nuclear power.”