No need to declare power sector emergency – PCCI

Categories: Business Updates

Date Posted: 08 Aug 2014

The Philippine Chamber of Commerce and Industry (PCCI) says there is no need for President Benigno Aquino III to declare an emergency in the power sector ahead of the looming power crisis in Luzon next year.

The PCCI issued the statement in following the warning of Energy Secretary Carlos Jericho Petilla that blackouts – running longer hours and lasting for weeks – are expected to hit Luzon in the summer of 2015 unless the Aquino administration takes crucial steps to avert them, such as declaring an emergency in the power sector.

The PCCI said that the serious concern about the power supply shortfall in Luzon in 2015-2016, a similar potential shortfall in the Visayas, and the ongoing shortage in Mindanao calls for all stakeholders to act in unison to address the issue at hand and not necessarily an emergency declaration.

“There is no need to declare a national emergency,” PCCI said.

From the combined economic, industry, investment, and political views, the PCCI said there appears to be two distinct critical periods or challenges to address concerning the looming power crisis: the 2015-2016 period, and post-2016 and forward.

The PCCI said 2015-2016 has to be confronted with “stop-gap” or “band-aid” measures, meaning any steps taken to cure, bridge, or aid the gap would have to be acceptable to all.

Post-2016 must be addressed with a well-laid out plan that is shared with all stakeholders and which government could smoothly and competently implement through the grant of emergency powers to the President, if the plan would warrant the declaration of a state of emergency, PCCI said.

“Without such a well-laid plan behind it, declaring a state of emergency would be dangerous and could eventually be counter-productive as we have experienced before,” PCCI added.

EPIRA amendment not needed

The PCCI also believes the power supply situation can be adequately solved without amending the Electric Power Industry Reform Act (EPIRA). It believes amending the law would create unnecessary restlessness and uncertainties and slow down the present market and investment momentum.

Petilla had earlier endorsed what he said was the best and fastest way the government could address this problem: for the President to declare a power emergency and invoke his powers under the EPIRA of 2001.

EPIRA prohibits the government from putting up power plants. However, Section 71 of the law states that the President, upon determination of an imminent shortage of supply of electricity, may ask Congress for authority to establish additional generating capacity under approved terms and conditions. (READ: Power emergency: What it means)

“The same situation may be expected should a national emergency that is not founded on any solid plan is declared,” the PCCI warned.

The private sector has already submitted several proposals to entice investments and improve generation adequacy including aggregating the demand of distribution utilities, opening the generation market to competitive bidding, and streamlining the business permitting and licensing system, the PCCI said.

It said that the national government should begin to consider these proposals in earnest, and develop them into a roadmap consistent with the goals of adequate and reliable power supply and competitive power rates. –

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