Govt to subsidize power . . .

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The Department on Energy (DOE) yesterday said that the government will subsidize the cost of electricity coming from generator sets. To offset the expected shortfall in power supply this coming summer, generator sets will be used under the plan giving President Benigno Aquino 3rd emergency powers.

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Energy Secretary Carlos Jericho Petilla said the public need not fear that they will pay for costlier power. Petilla said that the government can use the Malampaya funds to help subsidize power cost.

The government expects to pay P200 million to the companies which will participate in the Interruptible Load Program (ILP) that committed to provide 800 MW during the summer months.

“The standard ILP process dictates that part of the gencost of ILPs will be passed on to the people. However, the House version allows the government to use government funds instead of passing cost to people,” Petilla told The Manila Times in a text message.

Oriental Mindoro Rep. Reynaldo Umali, chair of the House energy committee, also explained that reimbursement will come from the Malampaya fund.

“There will be no additional charges that will be passed on to the public when the gensets run,” he said.

He stressed that there is no legal impediment to the use of Malampaya funds to reimburse ILP participants.

This is because the Supreme Court (SC) gave the Congress power to specify the energy-related projects for which it will be used.

Based on lawmakers estimates, the government will shell out P200 million to reimburse companies that will operate their gensets under the ILP during the shortfall in summer of next year.

The Lower Chamber passed last week House Joint Resolution 21, which authorizes President Aquino to establish additional generating capacity for the Luzon grid through ILP.

As well as fast-tracking of new committed projects and plants for interconnection and rehabilitation and the implementation of energy efficiency measures.

According to the resolution, there is a maximum projected supply shortfall of 782 megawatts (MW) from March to July 2015.

At least 135 MW is needed to meet the required regulating reserve while 647 MW is needed for the required contingency reserve.

Umali said 800 MW has been committed by various companies that have signed up for the ILP.

The DOE has given private genset owners until January 31, 2015 to register for the program to qualify for reimbursement from the government for fuel expenses and other costs.

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1 Comment

  1. Subsidy expectedly is not the right solution. It only satisfy the greed of the oligarch power producers at the expense of the taxpayers. Because these power oligarchs are operating as a cartel, they should be sanctioned, or amend the EPIRA to enable the government, through NPC and NGCP operate more generating plants in order for the country to have ample reserves at any time of the day. Truly, scarcity results to a high price of a commodity.