It has been almost a decade since a power industry reform act was passed. What are our lawmakers doing to solve the energy crisis?

The Philippines has had a long history of power supply shortages, with a power crisis dating back to the Ramos administration in the early 1990s. In 2001, Congress passed a major piece of legislation which lawmakers and industry leaders thought would solve the power situation: giving the power industry to the private sector.

But almost a decade after legislators passed the bill in what would later become Republic Act 9136 or the Electric Power Industry Reform  Act (Epira), various quarters are saying that the passage of a new bill seeking to revise the power reform law to enhance retail competition  in the sector could be the answer to a looming major power crisis that could cripple industries and affect the first ever fully-automated elections in the country.

Although RP Energy Secretary Angelo Reyes had assured the public that Luzon will not experience brownouts and that that the Luzon grid had adequate reserves until June, power interruptions were experienced in Metro Manila and nearby provinces which started last March 1 as the 1,200-megawatt (MW) Sual 1 in Pangasinan and 600-MW Masinloc 1 in  Zambales shut down due to boiler tube leaks.

Virtually the entire Philippines is now in peril of a crippling power shortage. Mindanao is experiencing critically low power supply, worsened by the El Nino weather phenomenon. Already, brownouts lasting up to twelve hours have been reported  in some areas. The region is highly reliant on hydro-power plant complexes, and as water levels continue to recede amid the dry spell, dark days are coming.

The Visayas, on the other hand, has also been experiencing rotating brownouts due to lower generating capacity  due to  breakdowns in major power plants.

A Political Solution?

Senate President Juan Ponce Enrile, author of Senate Bill 2121 seeking to amend the Epira, leads those who are calling for the passage to reform the reform law, saying this will benefit the consuming public.

The Epira provides a framework for the restructuring of the power industry, including the privatization of state-run National Power Corporation's (Napocor's) assets, with the goal of making the sector more competitive.

Enrile's bill would, in effect, lower the privatization threshold of Napocor's assets in Luzon and the Visayas to 50% from the current 70% to hasten "open access" and enhance retail competition. Ideally, he says, consumers should be able to choose where to buy their electricity. The lack of open access discourages investors from building new power plants, he says.

The Epira mandated the Napocor to be 70% privatized within three years of passage into law,  or by  2004, but this did not happen. Napocor privatization is currently pegged below 60%.

In 2007 and 2008, the Power Sector Assets and Liabilities Management Corp. (Psalm) successfully auctioned off Napocor's large assets, including the 600-megawatt (MW) Masinloc coal-fired power plant and the Ambuklao-Binga Hydroelectric plant. Last year, the 146.5 MW Panay and 22 MW Bohol diesel power complexes, the 108-MW Aplaya and 22.3-MW General Santos diesel power plants, and the 0.8 MW Amlan Power facility were sold. The Psalm auctioned off the National Transmission Corp., the state's transmission line, to the National Grid Corporation of the Philippines, a consortium partially owned by the State Grid Corporation of China. Whether these sales will translate to lower electricity rates remains to be seen.

Emergency Powers

The President, through Section 71 of the Epira, can seek congressional authority, through a joint resolution, to establish additional generating capacity to address power shortages.

Lawmakers, however, have not been keen on granting President Gloria Macapagal-Arroyo emergency powers, saying she has ample powers as chief executive to implement solutions and this may again result in expensive power purchase agreements like those done close to two decades ago.

Both opposition to, and support for, invoking Section 71 are effectively moot, however. Enrile and House Speaker Prospero Nograles have declared that due to the election campaign season, and because Congress is on recess, neither the Senate nor the House of Representatives will be able to muster a quorum to authorize emergency powers for the President.

Senator Manuel Villar, Jr., Nacionalista Party presidential bet, has called on the government to craft a long-term solution to the power shortage. "By now, the government should have developed contingency plans and long-term measures to address this problem, especially if it will prevent the growth of industries," Villar says. His running mate, Senator Loren Legarda, meanwhile, says the energy crisis is the  result of government's inability to encourage more private investors in the power sector, particularly in power generation.

But corporations and consortia have been getting into power, with power plants expected online late this year and early next year. That the Psalm has been able to sell off  Napocor's assets also shows that there is interest in the industry. Granted, however, that the initial cost in capital and time does give investors pause.

Besides, waiting for the participation of the private sector in power generation could prove futile, as the energy crisis could worsen in the coming months if the government does not provide short-term solutions.

Instead, legislators say the government should purchase power barges, which,  although costly, can increase the energy generation in affected regions as a stop-gap measure to the energy problem. Secretary Reyes, on the sidelines of an inauguration ceremony for a power plant in Cebu, says, however, that power barges “are not feasible at all.” By the time funds have been allocated, and the barges—practically just floating generators—have been purchased and delivered, the power crisis may already be over, or beyond hope.

Minority legislators seem to prefer the power barges, however, saying disposing of state assets in an election season should be shelved as this could lead to "midnight" asset sales. Privatization, lawmakers say, should be undertaken by the next administration.

With Congress out of the running for the next few months, it is clear that for all their power, our legislators may have to join the rest of the country in cursing at the darkness.