ILP firms could get tax break under emergency powers

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A HOUSE resolution seeking to grant emergency powers to President Benigno Aquino 3rd to avert a crippling electricity shortage in Luzon next year proposes granting tax relief to companies that participate in the Interruptible Load Program (ILP).

With the Aquino government practically running out of time to deal with the expected power shortage, Oriental Mindoro Rep. Reynaldo Umali, chair of the House energy committee, said the emergency powers will “fast track” solutions to avert the expected power crisis.

Among the solutions proposed is the grant of “tax relief” to companies taking part in the ILP.

The emergency powers are “really needed so that the government can grant tax relief to ILP participants,” Umali told reporters over the weekend.


Umali added that the president requested for a “fast-track solution” to stop the expected power crisis from hitting Luzon and that is exactly what the emergency powers will grant him.

He said Congress is likely to grant Aquino his request for emergency powers, which should cut down red tape in sourcing additional power generating capacity to meet an expected surge in power demand next summer.

The House energy committee last Friday filed Joint Resolution 21 authorizing President Aquino “to provide for the establishment of additional power generating capacity as mandated by Republic Act No. 9136, also known as the Electric Power Industry Reform Act (EPIRA), to effectively address the projected shortage of the supply of electricity in the Luzon grid from 12 March to July 2015.”

The resolution provides that “additional generating capacity shall be sourced from the ILP, fast-tracking of committed projects, and plants for interconnection and rehabilitation.”

The ILP seeks to encourage the private sector to run their own generator sets during peak demand periods next year instead of getting their supply from the Luzon grid. The electricity that would not be taken from the grid would then be available to household and small users, preventing rotating blackouts.

Umali said the success of the ILP will largely depend on the cooperation of the malls, factories and other private establishments to use their own generator sets whenever the National Grid Corporation of the Philippines (NGCP) expects supply to fall short of demand.

“Big power users will be asked to use their own power for two to three hours, five days a week, so that we have enough supply in the grid,” he said.

Under the resolution, Umali explained that ILP participants will be paid 7.5 centavos per kilowatt-hour for the power they consume using their own gensets.

The joint resolution, principally authored by House Speaker Feliciano Belmonte, seeks to grant the president “authority to establish additional power generating capacity to ensure the energy requirements of the country during periods of very tight energy supply.”

It also seeks to address the problem of Luzon “having a maximum projected shortfall of 1,004 megawatts (MW), of which 600 MW is needed to meet the required dispatchable reserve, and 404 MW is needed to meet the required contingency reserve. A total of four weeks of yellow alert is projected for the critical period.”

It empowers the Department of Energy to “administer and implement remedial measures” as well as the “subsidy for the compensation from the actual energy generated to address the power shortage.”

It also calls for the “adoption and execution of energy efficiency and conservation measures” in both public and private sectors.

“All national government agencies and local government units are hereby authorized to suspend the operability of pertinent laws, rules, and regulations including, but not limited to mitigating measures adopted for the Wholesale Electricity Spot Market (WESM) under Republic Act No. 9367,” the joint resolution stated.

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