Blackouts could cost economy P23B – Aquino

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IF an anticipated drop in power supply is not immediately solved and blackouts will occur next year, the cost to the economy could be as high as P23 billion, President Benigno Aquino 3rd warned on Wednesday.

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Citing government estimates, Aquino said the economic cost of the feared power outages could reach a minimum of P9.3 billion to as high as P23.3 billion, excluding foregone revenues in sectors that will be affected by brownouts.

“[It depends] on the duration of the power outage. The lower figure [P9.3 billion] assumes power outage of two hours a day on average for three months. The higher figure [P23.3 billion] assumes a worse scenario of five hours a day also for three months,” the President noted during the Presidential Forum of the Foreign Correspondents Association of the Philippines.

This, he said, will likely dent the annual gross domestic product (GDP).

“The economic cost as estimated here pertains to output foregone, i.e. GDP loss from stoppage of economic activities. The estimate does not include foregone investment and tourist arrivals arising from the negative impact of the power outage on the country’s image as investment and tourist destinations,” Aquino added.

It is for these reasons, the President explained, that he had asked Congress for extra powers under the Electric Power Industry Reform Act (Epira) to address the situation on a “worst-case scenario” perspective.

“If there is no power come our summer months, there will only be one party that will be blamed, and that will be the executive. So we were asking from them various powers, not emergency, but these are really embodied already in Epira—to address the situation if and when El Niño is really severe, the forced outages in the trend that they have shown in the past two years also continue, to address also the cannot-be-postponed Malampaya shutdown, among other things,” Aquino said.

Although there are several options that the government can take, renting generators for about two years is no longer being considered because setting these up would take about six months.

The President said the Interruptible Load Program (ILP) is a “plausible substitute” but these standby generators for the most part have never been considered as baseload plants.

“What’s the difference? Standby generator, you run for a few hours. These ILP producers, in effect, will have to produce on a very regular basis, perhaps on a daily basis, if and when the reserve situation is seriously jeopardized,” he also explained.

Aquino said the Energy department balked on running the Malaya plants because they are 30 years old and it would be costly to maintain both plants.

Meanwhile, 49 labor groups and workers’ organizations called on the President to fire Energy Secretary Jericho Petilla for “deceiving the Filipino people” by manufacturing a power-shortage scenario.

The workers’ group Nagkaisa (United) was reacting to revelations during a recent congressional hearing where Energy officials admitted that the projected deficit in supply in 2015 is only about 21 to 31 MW, a far cry from the 1,200 MW shortfall trumpeted by Petilla.

“It is now very clear to us that Secretary Petilla took the country for a ride. He bluffed the President, the Cabinet and everyone with his tall tales of thin power reserves to justify emergency powers that entail possible purchase of multi-billion peso generator sets” Joshua Mata, a group convenor. said.

Another convenor, Louie Corral, executive director of Trade Union Congress of the Philippines-Nagkaisa, said the government should have acted as early as 2011 to avert a power crisis by building new power plants and exercising strong regulatory powers to prevent market fraud.

“The only time we will support emergency powers is when the government finally decides to take over the whole industry with the utmost objective of bringing down the price and securing a sustainable power supply not only for present needs but also for the next generations to come,” Corral added.

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