Incentivize, not penalize, consumers to save energy

COMMONSENSE By Marichu A. Villanueva (The Philippine Star)

It was early autumn when we were in Chengdu City in the province of Sichuan, China more than two weeks ago. So the temperature at the time was really a little bit hot, though not humid as we have in the Philippines. Naturally, we preferred to stay indoors and inside air-conditioned rooms.

Once we got back to our hotel rooms, the first thing we did was to turn on our air-conditioners. But to our great disbelief, the thermostat in our hotel room was fixed at 26 degrees Celsius. We initially thought the air-conditioning was not functioning.

To our surprise, we were told at the front desk that air-condition temperature is regulated by the State and it cannot go below 26 degrees. We were told the regulation is part of Chinese government policy to reduce carbon emission. We have no choice but to bear the heat because no amount of tinkering with the thermostat can lower it below 26.

This regulation is not because China has any problem about electricity supply. In fact, China has more than enough power supply to help spur their country’s robust economic growth through these years. The central government authorities in Beijing have been strictly implementing this regulation as among the measures that China has taken to help reduce their carbon emissions into the atmosphere.

As responsible members of the international community, this is a token contribution of China to world efforts against global warming. The Chinese people are suffering the price of heavy air pollution due to years of use of coal-fired power plants, especially those living in Beijing.

Speaking of coal, it is alarming to see that a number of new power plant projects reportedly to be put up in various parts of the Philippines are mostly coal-fired. Obviously, this is because coal-fired plants are the easiest and the quickest to construct, not to mention less expensive to build. But coal-fired power plants unfortunately produce dirty air as what China is now battling with.

My recent experience in China came to mind after reading a published Circular of the Department of Energy (DOE) that appeared in The STAR yesterday. Its title says it all:

“Enjoining all electricity-consuming sectors to implement demand-side management program and other energy conservation measures.” It was signed by Energy Secretary Carlos Jericho Petilla on Aug. 11 but only got published yesterday.

Section 3 of the DOE Circular requires the thermostats of air-conditioning units in all government offices “shall be set no lower than 25 degrees celsius.” Where “adequate ventilation is available, all government agencies and offices shall discontinue the use of air-conditioning units, when weather permits.” This is the government demand-side management of the energy conservation program.

Exempted from this order are vital government installations such as hospitals, military installations, airports and other facilities of similar character that may maintain their regular use for the reliability and adequacy of power supply.

The same DOE Circular also encouraged all distribution utilities (DUs) such as Manila Electric Co. (Meralco) to implement demand-side management programs and other energy conservation measures for the private sector, and to undertake intensive information and education campaign to its consumers.

As used in this DOE Circular, “enjoin” means to command, or to order, or to direct, or instruct to denote it is mandatory. As stated in this DOE Circular, Petilla invoked Republic Act (RA) 7638, otherwise known as the Department of Energy Act of 1992 as well as RA 9136, or the Electric Power Industry Reform Act (EPIRA). In both laws, Petilla cited provisions that allow the DOE to ensure continuous, adequate, reliable and affordable electric power.

In particular, Petilla quoted Section 37 (1) of the EPIRA that “mandates the DOE to formulate and implement program, including a system of providing incentives and penalties, for the judicious and efficient use of energy in all energy-consuming sectors of the economy.” Moreover, the EPIRA declared as the policy of the State to “encourage the efficient use of energy and other modalities of demand side management.”

The DOE Circular on conservation measures was based from the 2014 Power Supply Situation Outlook for the country prepared by the National Grid Corp. of the Philippines (NGCP) on the projected tight power supply for the summer months next year. Coincidentally, the reduced power supply is expected with the scheduled preventive maintenance of the Malampaya natural gas plant, the major supplier of fuel to many power plants in Luzon in particular.

The NGCP noted with concern the Luzon grid is expected to be on “yellow alert” status, or the level of power supply may not be enough, resulting in power interruptions. The Mindanao grid is already experiencing rotational brownouts.

Both chambers of the 16th Congress are still conducting public hearings on the proposed grant of emergency powers to President Aquino. After initially hemming and hawing on emergency powers, the Chief Executive finally approved the DOE recommendation.

The anticipated long hours of blackouts and power interruptions coincide with President Aquino’s last two years in office.

While waiting for Congress approval of these emergency powers, the DOE is likewise implementing Interruptible Load Program (ILP) to address the looming shortage in the summer of 2015 instead of leasing bunker-fired generators.

In yesterday’s public hearing at the Senate, it came out that we, as consumers, have to pay as much as additional 7.5 centavos per kilowatt-hour (kwh) in our monthly electric bills for every 300 megawatts (MW) of additional capacity tapped under the ILP. Lawmakers earlier said they favored tapping local energy sources like the generators of malls and other big establishments under this ILP to fill the forecast shortage of three to four months next summer. Now we know why.

Petilla should stick to his energy conservation Circular which mandated the DOE to “develop and implement various electricity demand-side management programs and projects nationwide including a system of incentives and penalties after public consultations.” The best way to gain wide public support is to incentivize, not penalize, consumers to save on their use of energy.