Emergency powers feared to lead to huge debt

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The P7-billion debt that the government accumulated in the 1990s after it intervened in power generation is fueling Congress’ resistance to granting President Benigno Aquino 3rd emergency powers.

Rep. Ben Evardone of Eastern Samar, a member of the Joint Congressional Power Commission, made the disclosure on Tuesday in connection with a move of the House of Representatives to inquire into the expected power shortfall in the summer of 2015 instead of granting outright the President such powers.

Evardone said ghosts of government contracts with Independent Power Producers (IPPs) during the Ramos administration that led to massive brownouts were too horrific as to be easily forgotten.

A review of the IPPs during the Arroyo administration revealed that only six of the 48 IPPs that entered into a contract with government complied with their obligations in generating power.


The rest of the IPPs were paid by the government in fixed rates but miserably failed to generate the expected power supply, resulting in the P7-billion debt for the state and skyrocketing power rates.

“The proposal right now is to lease additional power barges. Well, it is virtually the same as what happened with the IPPs. How can we be sure that there won’t be a repetition of what happened in the 1990s? That is the issue that Secretary Petilla needs to hurdle,” Evardone told The Manila Times, referring to Energy Secretary Jericho Petilla.

Petilla has said there will be seven to eight-hour daily rotating brownouts every week by summer if the government fails to secure additional 800 to 1,200 megawatts of power supply.

In securing additional power supply, the government has three options: implement a mandatory Interruptible Load Program or the ILP (a scheme wherein malls and big companies with large standby generation capacity will not get power supply from power plants and instead run their generators); lease power generating sets for P6 billion in two years; or purchase such sets for as much as P10 billion.

Petilla favors the leasing option because of greater government control and security of the available power supply that would be available, considering that making ILP participation mandatory can scare businesses.

Evardone, however, said Congress remains skeptical about such “government control” because of the IPP crisis, on top of the P6-billion lease.

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2 Comments

  1. At this stage, we have a monopoly on provision of power.

    The paradox here lies within our capitalist framework –We urge everyone to become more n more successful and beat the competition..

    Although from what i can glean this Monopoly vis-a vis the electric provision .Was more of a very rich family able to gain control.So one else was able to get a “Look In”

    The price we pay, for allowing this monopoly is that the company can; and does supply a very “Lack luster” service;

    All the while”charging like wounded bull”

    The answer may be with the gov… will it be able to De-register provision of power?

    Not being lawyer;and only being in this country 6 years –I would be glad if some of your readers more Knowledgeable –could answer this.

    I remain your humble servant.
    David M Meyer (PhD Psych }

  2. Whatever is the decision of both Congress and Malacanang, it should be on the best interest of the general public. Consumers cannot afford anymore future increases in power rates. At present, our electricity rates are one of the highest in the whole world. If the primary reason for the impending power crisis is that of the government miscalculations, mis-planning or simply neglect of their duty, then it must be their responsibility to source the solution from the government budgets like the Malampaya fund or from the huge pork barrel of the President and not from asking the people to shoulder the increase for the additional power generators.