Political will, not emergency powers

ON DISTANT SHORE
By Val G. Abelgas

For many years now, the Philippines has been confronted with the nagging problem of power shortages, and every time it becomes so critical as to threaten the economy and the people’s daily lives, politicians always call for the granting of emergency powers to the President to avert the crisis.

The problem with such emergency powers is that, by its very nature, solutions are often temporary in nature, like patching potholes after a flood. After another heavy rain, the potholes are back to be patched up again with asphalt.

That’s what would probably happen if President Aquino were granted emergency powers to avert the crisis of daily blackouts in Metro Manila and the rest of Luzon.

Energy Secretary Jericho Petilla warned last week that the country will face an energy crisis next year, especially during the summer months of March to May, when demand peaks, with rotating brownouts that could last weeks.

Demand for power supply has been rapidly increasing because the economy is expanding. Supply is hardly keeping pace. The gap between demand and supply will worsen next year because of the maintenance shutdowns of some plants, and the delay in the construction of committed power plant projects that were expected to come on stream in 2015. The threat of drought is a reality that could further lower water levels in dams and drastically cut down hydropower supply. Added to this is the fact that the Malampaya natural gas facility off Palawan will be shut down for scheduled maintenance from March to April, adversely affecting supply of fuel to power plants in Luzon.

The blackouts would mean some businesses could shut down for days, resulting in possible lay-offs of workers and losses for the economy.
Petilla, who has refused to endorse the use of emergency powers in the past, reneged this time and said only the granting of special powers to President Aquino would avert an energy crisis.

Petilla and some lawmakers were hoping to avoid the need for emergency powers with the Interruptible Load Program, where large power users will be paid if they agree to go off the grid and use their generator sets during peak load hours. Since the ILP is voluntary, it will never be a surefire solution to the power supply crisis.

Under Petilla’s plan, the government would buy or rent diesel or gasoline-powered generator sets and power plants without bidding during the emergency period. Petilla and Sen. Serg Osmena, the biggest backer of moves to grant the President emergency powers and chairman of the Senate energy committee, admit that it would cost the government a lot of money and the power produced would be very expensive.

Like most band-aid solutions, the emergency plan would operate under a ‘better than nothing norm” or as Osmena put it, quoting former President Fidel V. Ramos, “the most expensive power is to have no power at all.”

Opponents of the emergency power proposal point out that the experience under Ramos, who was granted emergency power during his term to avert a major power crisis, should caution proponents on the fallacy of emergency powers.

Ramos allowed independent power producers (IPPs) to construct power plants with no-bidding contracts that had a “take or pay” provision that guaranteed the government would buy whatever the IPPs produced, even power that were not used. Napocor’s debts ballooned, and the government had to shoulder the bill, triggering the onset of a fiscal crisis and the rapid rise of power rates.

Opponents of the emergency power proposal said granting the President emergency powers would allow “quick fixes that will ultimately lead to higher prices of electricity without effectively solving the supply problem.”

Analysts suggest that the government should take a long-term look at the problem instead of depending on band-aid solutions as proposed by Petilla. Such short-term solutions, according to Dr. Giovanni Tapang of the University of the Philippines, only highlights the short-sightedness of the Aquino administration’s response to the power crisis.

Tapang suggests that the government should take a second look at the Electric Power Industry Reform Act (EPIRA) that barred the government from building new power plants and fully left the generation of power generation to the hands of the private sector.

“In surrendering government’s power to generate power to private corporations, we have lost — as Petilla and company discovered — our capacity to direct our long-term growth. It will always be dependent on the whims, and profit margins, of the corporations,” Tapang added.

Almost 13 years to the day after its passage on June 8, 2001, only one power plant has been built by the private sector, and the gap between supply and demand grew wider, and consequently, the price of electricity soared even higher. Obviously, EPIRA has failed in its twin objectives of increasing power generation while lowering prices.

I agree with Tapang that the government should scrap EPIRA, or at least amend it, to allow the government to reassume the responsibility of generating power.

“We can start by stopping the privatization of its remaining power assets. It should also start buying back the transmission lines now solely controlled by the private National Grid Corporation of the Philippines. In the generation sector, it should re-nationalize the power plants it previously sold to private companies and to reinvest heavily into power generation again,” Tapang said.

If the government could squander billions to non-critical expenses using pork barrel funds from the Priority Development Assistance Fund (PDAF) and the Disbursement Acceleration Program (DAP), it should be able to find money for the building of these plants. For starters, it should use the billions in Malampaya funds for the purpose it was created – to improve the country’s power supply situation – and not divert the money to some lawmakers’ lousy projects or to fund electoral campaigns.

For Aquino and our national leaders, it should not be a matter of getting emergency powers, but of gathering the political will to really solve the problem. Many of the country’s problems could have not worsened as much had our leaders – past and present – really buckled down to work and stopped thinking about politics after elections.

(valabelgas@aol.com)