• Emergency powers? What for?

    Ben D. Kritz

    Ben D. Kritz

    Prodded to action by the unexpected damage to Luzon’s electrical grid caused by Typhoon Glenda last week, Energy Secretary Jericho Petilla, backed by at least two Senators, called on President B.S. Aquino 3rd to assume “emergency powers” to deal with what is quickly becoming a serious energy crisis in the country.

    My instant reaction to the news was this: “The government has already created an emergency, why do they need special powers for that?”

    The declaration may already be made by the time this column sees print, or will be very soon, and the only certain result any electric consumer in the Philippines can expect is that the power crisis will quickly go from bad to worse.

    Consider what Petilla’s endorsement of “emergency powers” actually means. In effect, he is declaring that managing the country’s energy supply issues is beyond the capacity of the Department of Energy, or perhaps beyond his own capacity—that despite having wide authority to intervene in the electricity supply chain, he is unable to present any solutions to improve the availability and reliability of electric power in this country.

    Actually, that is not entirely accurate; according to several news reports and a great deal of incredulous discussion online, Petilla has proposed that the government lease a number of “power barges” to augment dwindling electricity supplies. While these would (assuming they are actually available) provide some short-term relief, the trade-offs are the undesirable side effects of sourcing power from oil-fired generators—excessive pollution and a heightened risk of environmental damage, and fuel and operating costs that are a couple orders of magnitude higher than those for a more conventional coal- or gas-fired plant. In addition, the wisdom of using floating power stations in the typhoon-prone Philippines may be a little questionable; at the height of Super Typhoon Yolanda, one such power barge at Estancia, Iloilo broke loose from its moorings and ran aground, causing an oil spill that fouled about 10 kilometers of coastline and according to Estancia residents, is still not entirely cleaned up yet, eight months later.

    The position of the government, of course, is that the power situation has become so critical that they are left with few options but to take advantage of the regulatory shortcuts a declaration of an emergency would provide in order to augment electric supply at the soonest possible time, ideally between now and the middle of next year. The power crisis we are experiencing now, however, was anticipated as long ago as 2008, when the shortage of electricity in Mindanao first became extremely critical.

    By 2010 when Aquino took office, the power situation had not changed much at all, nor had the obvious solutions. To correct Mindanao’s chronic supply shortfall, new plants needed to be built, which would also solve the problem of over-reliance on hydroelectric power; in the case of the latter, the government—which owns most of Mindanao’s hydroelectric capacity through the National Power Corporation (Napocor)—needed to make a big investment in reconditioning and upgrading those aging facilities to improve their efficiency and reliability. The Visayas also was short of power, but due to the fragmented nature of the region, the problem was not as noticeable. Some new capacity needed to be built, but because the demand on any one generation facility, at least outside major cities like Cebu or Iloilo, was much smaller, there was a greater opportunity to pursue more sustainable energy projects like biomass, solar, and geothermal plants.

    And in Luzon, the problem was not so much capacity—hypothetically, there was enough generating capacity to cover needs until about 2022—but the poor condition of many power plants, which meant that they could regularly supply only a part of their designed capacity. The obvious solution here was to implement and strictly enforce a workable performance-based regulation program, so that power producers would have incentives to improve reliability and minimize costs, invest in the few remaining Napocor assets to improve their performance, and build some additional capacity to ensure that a safe buffer supply could be maintained as electricity demand grew.

    Four years and two energy secretaries later, the overall situation is exactly the same, and very little of what is actually a relatively simple set of solutions has actually been implemented. If there is now an emergency, it is because the Aquino Administration has mishandled—or perhaps more accurately, failed to handle at all—the task of ensuring the nation’s energy requirements are met.

    We will, of course, have to wait to see what the President and Mr. Power Barge Petilla will do with their “emergency powers”; it is conceivable, though not likely, that they could surprise us with some practical ideas. At this point, however, their record of poor performance in addressing power concerns strongly suggests that all “emergency powers” will do is to allow them to screw things up even faster.



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    1. David M Meyer on

      A state of emergency is not going to be a long term answer–We are faced with a monopoly of a vital national resource —

      This monopolization. has given rise to the cavalier way this company is treating its customers ..
      Surely the Filipino people deserve better?

      Every year thi country is battered by typhoons; yet no effort is made to deliver a safer more efficient power service

      The profits the company makes; dos not seem t make any difference ; to the morass of power lines and cables –That “decorate” our streets.

      It would appear that while this stranglehold of our power remains..The company can Just shrug its shoulders..Go on making huge profits..Whle doing absolutely nothing..

      We can go on telling them, berating them …All to no avail…..They are the only ones who are delivering the power..as far as they are concerned we are like a lot of whining kids ..They are treated us as such
      David M Meyer

      • The messy wires we see are, usually, the telephone and cable TV wires.

        Electrical power lines are a lot les forgiving. They are the 3 parallel lines along the highest poles. (Generally speaking.)

        Meralco and other distribution utilities are monopolies within their franchise areas.

        Power generation is open to multiple parties, though dominated by a few. Long-distance transmission from generators to utilities is a monopoly of newly-privatized NGCP.

        In theory, all of these guys are subject to government regulation. The same government that this newspaper is proposing to (re-)nationalize the entire power industry.

    2. Oil and gas-fired plants serve a vital function, which is to run only when there is a heavy load on the grid. They shut down in favor of the coal-fired “baseload” plants when we don’t need so many watts. These plants can also be placed on barges and towed around the world.

      In concept, leasing power barges involves paying rent for a floating power station that already exists. The downsides have already been pointed out. Here are the benefits compared to a fixed plant:

      a) lead time is only waiting for the barge to be towed here

      b) smaller financial commitment for the (temporary) capacity obtained

      c) moored offshore instead of taking up land

      It’s a tradeoff to help close the wattage gap we face.

      As for the Luzon plants, “nameplate” capacity is misleading. All machinery has scheduled and unscheduled downtime. DOE interventions, cajoling plants into delaying maintenance to avoid peak season cannot have helped in the long run. I think the real-world capacity of the Luzon grid has been amply shown over the last few years. The wattage gap is real and set to grow, assuming the economy continues to grow.

      Your point about how we got here in the first place is well taken, although it must be asked if any administration, or any set of palatable incentives, could have overcome the reluctance of private actors to invest in generation assets. By invest, I also mean overhauling of old plants. Where private actors fail, by necessity, government must (try to) act.

      As for screwing things up, public vigilance through constructive criticism can only help.

      Is it necessary to invoke emergency powers to build a government-owned power plant, or to rent power barges? Provided that the legislature passes an enabling budget (and the SC keeps silent), then, no.

    3. Mr. Kritz, the government owned one unit which they said very expensive to run but vz power barges cost. Our country has more steam power than we needed and with minimum enviromental hazzard. Local investor and technical staff are available. What more do they want. Why did Mr. Petilla didn’t ask them for feasibility study since he became the Energy Secretary 4 years ago? If he needs tong then ask them because it will be cheaper than oil or carbon polluting power generating plants.

    4. Rene Pamintuan on

      The meager focus they are giving on Solar and other renewables is very obvious. While Germany and UK are converting their coal and diesel power plants in favor of renewables, we are continuing the use of fossil and mineral fuels systems. Renting is also a negative deal. Rent does not allow ownership of the units, and at end of rent period will mean no equity ever established. Solar Farms can be established and working in a matter of months, while fixed generating assets may take at least 3 years to set up. Solar Farms do not mess up the environment, are fuel free, and will continue to run with good management and storage systems. There is too no carbon footprint. Lets go Renewables!

    5. This is a very informative analysis of the energy crises and the over-the-top suggestion of this no-clue Sec. Petilla to egg King PNoy to declare a state of emergency for their failures. This administration is so focused on doing its all to accomplish their personal missions and vendetta that they forget what are supposed to be their jobs. Lack of foresight is one of the very glaring incompetence. I appreciate this article and those before this. Cannot help but notice the difference between this foreign-sounded family name of the writer compared to the articles of Peter Wallace of another broadsheet, who at a very slight advantage, spin the issue to continue to protect his favorite politician, King PNoy as if this incompetent one is the solution to our miseries, never to say anything negative or bad about King PNoy.