Energy Secretary Jericho Petilla on Friday made it clear that President Benigno Aquino 3rd is not asking for blanket authority from Congress in entering into contracts with power producers.
Petilla made the statement before a meeting of the Joint Congressional Oversight Committee on energy issues, a day after the President announced that he will ask Congress to allow the government to contract power generators through a House resolution.
Aquino said he needed the emergency powers to deal with a looming energy crisis.
Under the Electric Power Industry Reform Act, the government cannot enter into contracts with power producers unless both chambers of Congress grant the President emergency powers to do so.
Congress “will be defining the terms and conditions of the authority that you will give to the President. We are not asking for a blanket authority. We’ll come up with circular which will be a part of our recommendation on your resolution which states that these government-contracted capacities will only be on standby.
They won’t compete with [those]of the private sector,” Petilla said.
He added that the government will have to spend P6 billion in contracting power producers by end of October–an amount good for generating 600 megawatts for three years.
Failing this, the country will endure at least two-hour rotating brownouts by next summer.
“These government-contracted generating capacities cannot run until there is a yellow alert. There are measures that can be done so these won’t run unless it is actually needed,” Petilla said.
A ban on the government inking contracts with power producers stemmed from debts accrued by the state-run National Power Corp. (Napocor) after emergency powers were granted to then-President Fidel Ramos in 1993.
Ramos had contracted independent power producers (IPPs) to address daily brownouts that lasted up to eight hours.
Under this scheme, the long process of procurement is waived to address the immediate need of generating power.
A government review of the IPPs, however, has revealed that only six of the 48 contracted IPPs complied with the deal.
The rest failed to generate the corresponding power supply, resulting in P7 billion worth of debts for the state and soaring electricity rates.
Rep. Romero Quimbo of Marikina City (Metro Manila), vice chairman of the House Committee on Energy, shared Petilla’s caution on giving the President blanket authority in dealing with power producers.
“It [emergency powers]must not usher a return by the government to the energy sector. Let’s not get into this slippery slope. We’ve learned our lesson with Napocor that the government is inefficient when it comes to running power plants,” Quimbo said in a text message.
“We must caution that the grant of emergency powers must be limited in scope and duration. We must not allow it to last beyond the period during which the emergency exists and cannot reach into other areas that are not in any way connected to solving the emergency,” he added.
Quimbo, however, backed additional powers for the President to ensure an uninterrupted power supply especially next year, when the country hosts an Asia Pacific Economic Cooperation (APEC) summit.
“The existence of an emergency is very clear. Power shortage means power interruptions. We can’t compromise our growth and show inefficiency, especially during [the]hosting [of the]APEC [summit],” he said.