TUCP-Nagkaisa challenges DOE and ERC to disclose true reserve power

A Press Statement by the Trade Union Congress of the Philippines-Nagkaisa (TUCP-Nagkaisa)
September 24, 2014

The Trade Union Congress of the Philippines-Nagkaisa (TUCP-Nagkaisa) challenged both the Energy Regulatory Commission (ERC) and Department of Energy (DOE) to disclose their power supply data.

If the ERC which is supposed to be the independent power regulator has not spoken about an impending power shortage in 2015, even as the DOE is all over the place announcing a 300 megawatt deficit that can climb to 800 megawatt. Perhaps the ERC is aware of the existence of other sources of power.

We stressed the importance of correct data in undertaking power policy. If DOE has incorrect data, then the wrong arguments are being advanced and that’s is why false solutions which are very expensive such as gas turbines, power barges, and generator sets are now being prioritized.

TUCP-Nagkaisa pointed out that the DOE proposal of contracting P12 billion of capacity – 300 megawatt genset or power barge with another 300 megawatt as reserve – will translate into easily a 50-centavo per kilowatt hour increase to be borne by all power consumers nationwide for two years. This will be an additional burden that workers and consumers can ill afford.

On the other hand, the TUCP-Nagkaia said that here are perhaps other more cost-effective solutions such as the Interruptible Load Program.

We are not comfortable with the ILP because it smacks of Meralco consumers subsidizing business and malls running their own generators to power up their airconditioning and electricity powered operations. However, it might, in the short run, be the least cost solution and power barges which are so expensive. It’s just like buying 15 reserve tires when all you need is 1 for your car.

There is 1,300 mw of ILP out there. The question is who is campaigning for ILP participants to come on board to address the power crisis. Or is the DOE leaving the negotiating to Meralco? We can safely assume that it is being left entirely up to Meralco and that the DOE is again abdicating on its responsibilities. What has the DOE has done? Have they requested the President and the economic cluster of the cabinet to campaign with the potential ILP participants to open themselves to the ILP?

TUCP-Nagkaisa projections factor in ILP using diesel at P45 per liter as costing the consumers only an additional 10 centavos per kilowatt hour. You will have the added advantage that the 10 centavo increase will only be for the months you actually use ILP which can be as little as 3 months. Also, only customers in Luzon will be burdened, sparing Visayas and Mindanao.

TUCP-Nagkaisa has also advanced the adoption of corporate-wid – and not just voluntary – demand-side management (DSM). Raising airconditioning by 1 degree will result in less demand for power and free up capacity.

We are looking at DSM where industrial operations will be compensated for running at off-peak hours. Why doesn’t ERC and DOE look to a solution that will not bring up power rates and that will lower carbon emission.

“But the first thing is to get the data right. Even now TUCP suspects that a lot of available power is being concealed. Take the retail suppliers who are providing the power needs of big industrial and commercial power users. Only 60% of the total capacity they have is under take-or-pay contracts with these large users. Where is the rest of the 40%? Are they just waiting for ERC to lift its current cap on prices in the WESM? And there is no more cap they will bid in?”

TUCP has conditionally supported the grant of emergency powers as long as it does not increase power rates. We warned that an increase in the price of power is sure to create an inflationary domino effect. Power is not a “stand alone” issue.