Dissecting the Energy Summit

Recent Post

Brace for a fuel shortage in Luzon and thereafter, an economic crisis

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Remedies for cartelization

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Pandacan revisited

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Last January, the Philippine Energy Department hosted, amid much pomp and pageantry, the Energy Summit. Anyone who was someone was there: CEOs of all the energy companies, government officials, employees from the Department of Energy’s attached agencies, the press.

More than a month has passed since the Energy Summit yet the DOE posted the summit’s report online just recently. Compare this to the speakers’ presentations being immediately posted on the summit and DOE websites. So much for a “genuine sense of urgency to spur creative juices and to unleash latent talents and energies.”

In her speech at the last day of the summit, the President ordered a string of actions ostensibly to mitigate the impact of high oil prices and high electricity rates.

But most of the actions the President outlined in her speech need legislative action.

Harping on the need for MERALCO to source its power supply from the open market and its subsidiaries, the President wants MERALCO not to source from the market at peak hours.

The culprit in this case is Section 45 of Republic Act No. 9136 or the Electric Power Industry Restructuring Act (EPIRA). The law allows distribution utilities like MERALCO to source its power from its subsidiaries, which in many cases may be higher than the market price or from NAPOCOR’s price.

To cure this aberration, Section 45 of the law needs to be amended to bar distribution utilities from sourcing their power supply from their subsidiaries or affiliated companies.

She likewise “instructed” the Bureau of Consumer Protection of the Department of Trade and Industry (DTI) to petition the Energy Regulatory Commission (ERC) to prohibit distribution utilities from charging system losses as a separate item.

Again, instead of finding long-term solutions, the President and her administration are acting like snake oil salesmen.

If the administration wants to indeed prohibit systems losses from being charged to the consumer, an amendment to Section 43(f) of the EPIRA is in order. Specifically, the repeal of Section 10 of Republic Act 7832 or the Electric Power Pilferage Act should be revisited. This will force the electric utilities to be more efficient, and prohibit them from passing on their inefficiencies to the hapless consumer like you and me.

Interestingly, these issues were not addressed by House Bill No. 3124, or the bill amending EPIRA, and sponsored by the dutiful First Son.

The President also underscored the reduction of the country’s dependence on foreign oil by using more biofuels.

Biofuels have been billed as a way to energy independence and clean environment. But a recent study published in the prestigious scientific journal Science questions this premise. According to the Daily Telegraph, one of the authors of the study noted, “All the biofuels we use now cause habitat destruction, either directly or indirectly. Global agriculture is already producing food for 6 billion people. Producing food-based biofuel, too, will require that still more land be converted to agriculture.”

We shall however discuss the biofuel debate in a separate column.

Finally, with the President’s unico hijo chairing the House Energy Committee, these amendments should be a cinch. After all, the First Son has complained to all and sundry that the then House leadership had not prioritized his committee report, which seeks to amend the EPIRA, in plenary discussions.

Curiously, the administration has not publicly said that these amendments to the law should be part of the amendatory bill.

Truly, there is more to it than meets the eye.

Neither did the President, in her speech, set a deadline for all the initiatives she had outlined.

So what was the Energy Summit all about?

Smoke and mirrors, and products peddled by snake oil salesmen!

Disclaimer: The views and opinions advanced in this article is the author’s own, and may not necessarily represent the views and opinions of THE LOBBYiST, its editors, or its publishers.

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