PALACE:  DON'T STIR UP POWER ISSUE

With the likelihood of higher electricity rates still bedeviling consumers and keeping energy officials and power firms on the defensive, Malacañang is calling on concerned parties to work things out and avoid inflaming the issue. Meralco said it based its rate hike petition – approved by the Energy Regulatory Commission – on the higher cost of supply from generation companies. The SC’s temporary restraining order (TRO) does not apply to generation charges collected by power firms from Meralco. After Meralco’s warning, Presidential Communications Operations Office Secretary Herminio Coloma Jr. also assured the public of government efforts to ensure efficient service to power consumers. “It is the duty of the government to protect the welfare of the citizens. It is also the duty of Meralco and all companies in the power industry to ensure that the services are delivered to the public,” Coloma said. “The government will coordinate with the industry to achieve this objective,” he added. Valte said the government is open to amending the Electric Power Industry Reform Act (EPIRA) and that the Department of Energy is mediating between Meralco and its power suppliers. Energy Secretary Jericho Petilla said they were trying to work out a more equitable cost-sharing arrangement between Meralco and power producers.

ALSO: Emergency powers eyed

To forestall power shortages, some members of the House of Representatives are proposing to give President Benigno Aquino III emergency powers to give him more control over power generation in the country. Congress should look into the possibility of granting limited emergency powers to the President so he can fast-track the construction of more power plants, Eastern Samar Rep. Ben Evardone, an administration ally, said on Saturday.An opposition party-list member, Rep. Terry Ridon (Kabataan), said the state should take over all power utilities if distributor Manila Electric Co. (Meralco) and the private power generators could not provide affordable service to the public, in order to avoid the prospect of debilitating blackouts. Evardone said that with emergency powers, Mr. Aquino should be able to deal with the “catastrophic problems” of rising cost of electricity and deterioration of mass transport facilities.He said the country needs to have more power plants to meet growing demand and to bring about lower electricity costs. Meralco on Saturday said it had been receiving demand letters to pay the power bills it incurred during the the Malampaya maintenance shutdown, but could not make full payments because of the Supreme Court order stopping it from collecting the P4.15/kWh increase in generation and related charges. Only one other president, Fidel Ramos, was granted emergency powers to deal with an electric power crisis in 1993. The country was then experiencing widespread blackouts because of huge demand for electricity and ageing power plants, the abolition of the Department of Energy and the mothballing of the Bataan Nuclear Power Plant by the previous Cory Aquino administration. Congress not only created an energy department but also gave Ramos special emergency powers to resolve the power crisis. Using the powers given to him, Ramos issued licenses to independent power producers (IPP) to construct power plants within 24 months. To attract investors, he approved supply contracts that guaranteed the government would buy whatever power the IPPs produced.

ALSO: Emergency powers for Pnoy junked  at house

Speaker Feliciano Belmonte Jr. and several House leaders on Saturday rejected a proposal to grant President Benigno Aquino III emergency powers to solve two of the country’s problems: rising cost of electricity and lack of mass transit in Metro Manila.Congress would only grant such power if and when the President would ask for it, Belmonted said. “I would not give any such power unless the President is asking for it,” Belmonte told the MST Sunday in response to Rep. Ben Evardone’s proposal for Congress to study the possibility of granting Aquino an emergency power “to deal with two ‘catastrophic problems.’ Evardone was referring to the rising electricity cost and lack of mass transport in Metro Manila and neighboring areas. “In which case, it would still need studying,” Belmonte said. In making the proposal, Evardone said “the emergency powers shall, however, provide safety nets to ensure transparency and accountability. “The emergency powers should be limited in scope to cover only projects in the power and transport sectors. It should also have a limited time frame, say one year,” the Samar lawmaker said. But administration allies also pooh-poohed Evardone’s idea for an emergency power for Aquino.

ALSO: Palace Careful on Jinggoy PDAF issue realigned for city of Manila

Malacañang yesterday tread carefully on the issue of the P100-million Priority Development Assistance Fund (PDAF) realigned by Sen. Jinggoy Estrada for Manila which is now governed by his father Joseph as mayor. Senator Estrada has been linking the PDAF issue to politics, particularly the 2016 elections. He claims the administration is targeting him to derail any plans to run for higher office two and a half years from now. Asked why President Aquino did not directly veto Senator Estrada’s PDAF realignment in the 2014 General Appropriations Act even after saying he was for its abolition, deputy presidential spokesperson Abigail Valte said the explanation in the Chief Executive’s veto message would speak for itself. “If you read the veto message of the President, it’s quite clear. There are items under direct veto, there are items under conditional implementation and the reasons are stated,” Valte said over radio dzRB. She said people should not read too much into it because “it’s exactly what it is, what it says: it’s conditional implementation.”


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Palace: Don't Stir Power Issue

MANILA, JANUARY 14, 2014 (PHILSTAR) With the likelihood of higher electricity rates still bedeviling consumers and keeping energy officials and power firms on the defensive, Malacañang is calling on concerned parties to work things out and avoid inflaming the issue.

Deputy presidential spokesperson Abigail Valte made the appeal yesterday as she lamented how the issue had become “too sensitive” in the wake of widespread outrage over the announcement of the Manila Electric Co. (Meralco) of a sharp rate hike in December.

Compounding the matter was the power firm’s warning of rotating blackouts in the summer months in the event it is barred permanently from implementing its more than P4 per kilowatt-hour rate increase.

“At least on our end, we are doing our part to ensure there would be effective solutions to what they are facing right now,” Valte said over radio dzRB.

She said there are definitely solutions to the country’s power woes and that it would be best for the public and industry stakeholders to avoid moves and statements that would only make matters worse.

On Thursday, Meralco said the Supreme Court’s 60-day freeze order on its planned power rate hike would disrupt the overall power supply chain and could result in rotating blackouts in the summer months.

Meralco said it based its rate hike petition – approved by the Energy Regulatory Commission – on the higher cost of supply from generation companies.

The SC’s temporary restraining order (TRO) does not apply to generation charges collected by power firms from Meralco.

After Meralco’s warning, Presidential Communications Operations Office Secretary Herminio Coloma Jr. also assured the public of government efforts to ensure efficient service to power consumers.

“It is the duty of the government to protect the welfare of the citizens. It is also the duty of Meralco and all companies in the power industry to ensure that the services are delivered to the public,” Coloma said.

“The government will coordinate with the industry to achieve this objective,” he added.

Valte said the government is open to amending the Electric Power Industry Reform Act (EPIRA) and that the Department of Energy is mediating between Meralco and its power suppliers.

Energy Secretary Jericho Petilla said they were trying to work out a more equitable cost-sharing arrangement between Meralco and power producers.

The surge in generation cost was triggered by the scheduled maintenance shutdown of the Malampaya natural gas power plant and the “forced shutdown” of other plants.

Meralco said it had to get supply from the more costly Wholesale Electricity Spot Market (WESM) as a result.

Some lawmakers had likened Meralco’s warning of rotating blackouts to blackmail.

“It appears to be Meralco’s way to exert pressure to lift the temporary restraining order and give way to raising power rates,” Quezon City Rep. Winston Castelo said. “This saddens us because it’s the people who will suffer eventually.”

Emergency powers

Eastern Samar Rep. Ben Evardone, for his part, said the rising power cost is one of the two “catastrophic problems” that President Aquino needs to address immediately, using emergency powers.

He said the other “catastrophic” problem is the lack of mass transit system in the country, particularly in Metro Manila.

Evardone said the two problems – which are threatening to undermine the country’s growth – should be tackled by an administration armed with emergency powers.

“The emergency powers shall, however, provide safety nets to ensure transparency and accountability,” Evardone said in a statement.

“I think this is a golden opportunity because we have a very honest President who is incorruptible and who enjoys the confidence of domestic and international investors,” he said.

He said there is an urgent need to fast-track the construction of more power plants not only to meet the growing demands of a rising economy but more importantly to lower the cost of electricity.

In the same manner, there is a great need to speed up the construction of a mass transit system in Metro Manila to arrest the worsening traffic problem and provide commuters a more efficient mode of transport, he said.

“And all of these can be achieved by empowering President Aquino with powers that will expedite the process of implementing mega power and mass transit systems,” Evardone said.

Manila Rep. Lito Atienza, a member of the so-called independent bloc in the House of Representatives, dismissed Evardone’s call, saying emergency powers are unnecessary and that all Aquino needs to do is to be “more decisive, action-oriented, and really get into the country’s problems.”

“That’s not an option that will solve these ills,” Atienza said in a telephone interview, adding the administration’s attitude in dealing with governance and crises has been one of apathy.

He cited the case of the Department of Transportation and Communications (DOTC) and the Land Transportation Office, which have not been able to do the simple task of providing new car owners with stickers and license plates.

He also cited the case of the Languindingan International Airport, which still lacks runway lights and some landing instruments.

“If that’s the attitude of the Cabinet of P-Noy, like in the DOTC, then there must be something really wrong in the leadership. I’m sure this is being replicated in many other agencies in government. If he (Aquino) does not know what’s happening, then he is being remiss in his duties,” he said.

Atienza said granting Aquino emergency powers would only mean that the same authority would be delegated to his “inefficient” Cabinet officials.

He said inefficient and corrupt Cabinet officials were not being punished but were instead being given “a clean bill of performance.”

Meanwhile, Reps. Neri Colmenares and Carlos Zarate from the Bayan Muna party-list also accused Meralco and power generators of blackmailing consumers into accepting higher electricity rates.

Last week, Philippine Independent Power Producers Association president Luis Miguel Aboitiz said that because of the TRO, unpaid power generators might not have enough cash to pay for fuel for peaking plants.

“This is clear blackmail. Meralco and Aboitiz are trying to circumvent the Supreme Court temporary restraining order with this threat,” Colmenares said.

“What is obvious is that the problem was caused by government’s flawed policy of totally abandoning the power sector at the hands of private corporations through EPIRA,” he said. – With Paolo Romero

FROM THE INQUIRER

ALSO: Emergency powers eyed By Leila B. Salaverria Philippine Daily Inquirer 12:41 am | Sunday, January 12th, 2014

Aquino must avert power crisis, lawmakers say


President Benigno Aquino III

To forestall power shortages, some members of the House of Representatives are proposing to give President Benigno Aquino III emergency powers to give him more control over power generation in the country.

Congress should look into the possibility of granting limited emergency powers to the President so he can fast-track the construction of more power plants, Eastern Samar Rep. Ben Evardone, an administration ally, said on Saturday.

An opposition party-list member, Rep. Terry Ridon (Kabataan), said the state should take over all power utilities if distributor Manila Electric Co. (Meralco) and the private power generators could not provide affordable service to the public, in order to avoid the prospect of debilitating blackouts.

Evardone said that with emergency powers, Mr. Aquino should be able to deal with the “catastrophic problems” of rising cost of electricity and deterioration of mass transport facilities.

He said the country needs to have more power plants to meet growing demand and to bring about lower electricity costs.

It also needs to have more mass transit systems to ease traffic problems and other commuter woes, he said.

“And all of these can be achieved by empowering President Aquino with powers that will expedite the processes of implementing mega power and mass transit systems,” Evardone said in a text message.

“Maybe we can shorten the bidding process under the Procurement Act and simplify the Swiss challenge mode of inviting investors in the power and transport sectors,” he added.

Limited for a year

Evardone said the usual means of dealing with public utility woes may not be enough given the magnitude of the problem.

“It has been proven that palliative solutions to these problems have very little impact,” he said.

“The sad state of our power and mass transit facilities, which have been the result of long years of neglect, has had a very debilitating effect on our economy and people,” he said.

Evardone said the emergency powers he envisions for the President would cover only projects in the power and transport sectors and should last for a limited period, perhaps about a year.

He said this would be a good time to grant such powers, as the President enjoyed the support of domestic and international investors.

Precedent in 1993

Only one other president, Fidel Ramos, was granted emergency powers to deal with an electric power crisis in 1993. The country was then experiencing widespread blackouts because of huge demand for electricity and ageing power plants, the abolition of the Department of Energy and the mothballing of the Bataan Nuclear Power Plant by the previous Cory Aquino administration.

Congress not only created an energy department but also gave Ramos special emergency powers to resolve the power crisis. Using the powers given to him, Ramos issued licenses to independent power producers (IPP) to construct power plants within 24 months. To attract investors, he approved supply contracts that guaranteed the government would buy whatever power the IPPs produced.

A national emergency

But this became a problem during the East Asian financial crisis of 1997 when the demand for electricity contracted and the Philippine peso lost half of its value.

Ridon said that if blackouts are indeed threatening the Meralco’s franchise area, that can be considered a national emergency, which means the state can take over power utilities, from generation to transmission and distribution.

“If Meralco and the power generators cannot deliver affordable power rates to the public, all power utilities should now be taken over by the state for its operations,” he said in a statement.

He believes that the government can seize control of generation plants even if they are not considered public utilities under the Electric Power Industry Reform Act (Epira).

“Despite the Epira provision, the public now knows that power generation utilities have the greatest effect on power rates. Clearly, these utilities are businesses imbued with great public interest,” he said.

He said threats of power supply disruptions from Meralco could be construed as blackmail in order to get the public to accept higher electricity rates.

Ridon said he might even seek the repeal of Meralco’s legislative franchise if it could not provide the public electricity at the least cost.

The public was able to get a temporary respite from Meralco’s latest proposed power rate increase of P4.15 per kilowatt-hour, but the firm is seeking the dismissal of the petitions against the increase before the Supreme Court.

Meralco has explained that the rate increase was necessitated by the scheduled shutdown of the Malampaya natural gas pipeline last year and several power plants that were supposed to make up for Malampaya’s closure also made unscheduled shutdowns during the period, forcing Meralco to buy more expensive power from the Wholesale Eletricity Spot Market (WESM).

Meralco money woes

Meralco on Saturday said it had been receiving demand letters to pay the power bills it incurred during the the Malampaya maintenance shutdown, but could not make full payments because of the Supreme Court order stopping it from collecting the P4.15/kWh increase in generation and related charges.

The company said its cash flow was at risk of being severely restricted, and that further constraints on its ability to collect the increased charges could disrupt the entire power industry.

If this happens, Meralco said, rotating blackouts will “surely” hit its network of 4.8 million homes and 500,000 industrial/commercial customers comprising private businesses and government institutions.

“If the current situation persists, Meralco will face the great risk of not being able to purchase all the electricity needed for the succeeding months, especially if abnormal or extraordinary supply versus demand conditions continue,” Meralco explained in the comment it submitted to the high court on the temporary restraining order (TRO) against the rate increase that the latter issued last Dec. 23.

Meralco said that to cope with the TRO, it partially deferred payments to the operator of the WESM, some power suppliers and the National Grid Corp. of the Philippines.

“While the TRO is effective, Meralco is at undue, ever-present, and constant risk and threat of being required to pay the full amount of the increase in generation and transmission charges or of being denied continued access to electric supply and transmission under its PSAs (power supply agreements), the WESM and the relevant ERC (Energy Regulatory Commission) regulations,” Meralco said.

Meralco asked the high tribunal to lift the TRO and deny the petitioners’ prayer for the issuance of a writ of preliminary injunction.

It also asked that the power generation companies be enjoined to file comments on the TRO, and that the petitions of party-list Bayan Muna and the National Association of Electricity Consumers for Reform (Nasecore) be dismissed.

The militant Bayan Muna said in a statement that Meralco and the power generation firms are “blackmailing” the public into accepting higher power rates supposedly to prevent blackouts in the wake of the temporary restraining order issued by the Supreme Court on the proposed power rate increase. With Riza T. Olchondra

ALSO: Emergency powers for Pnoy junked By Maricel Cruz | Jan. 12, 2014 at 12:01am

Speaker Feliciano Belmonte, Jr (photo), other solons see no need for emergency power.

Speaker Feliciano Belmonte Jr. and several House leaders on Saturday rejected a proposal to grant President Benigno Aquino III emergency powers to solve two of the country’s problems: rising cost of electricity and lack of mass transit in Metro Manila.

Congress would only grant such power if and when the President would ask for it, Belmonted said.

“I would not give any such power unless the President is asking for it,” Belmonte told the MST Sunday in response to Rep. Ben Evardone’s proposal for Congress to study the possibility of granting Aquino an emergency power “to deal with two ‘catastrophic problems.’ Evardone was referring to the rising electricity cost and lack of mass transport in Metro Manila and neighboring areas.

“In which case, it would still need studying,” Belmonte said.

In making the proposal, Evardone said “the emergency powers shall, however, provide safety nets to ensure transparency and accountability.

“The emergency powers should be limited in scope to cover only projects in the power and transport sectors. It should also have a limited time frame, say one year,” the Samar lawmaker said.

But administration allies also pooh-poohed Evardone’s idea for an emergency power for Aquino.

In separate interviews, with the MST Sunday, Cavite Rep. Elpidio Barzaga, Jr., AKO-Bicol party-list Rep. Rodel Batocabe, both administration allies; and opposition Reps. Rodolfo Albano III and ABAKADA party-list Rep. Jonathan dela Cruz said that that Evardone’s proposal was baseless.

“I personally think that the prevailing circumstances do not warrant the exercise of emergency powers by the President,” Barzaga said, noting that “all the systems are in placed to address the present problems.”

Barzaga warned that arbitrary exercise of emergency powers would not do any good for the country and would only discourage business investors to the country.

Batocabe said there was “no extra ordinary circumstances” to warrant such powers.

Albano, member of the House opposition bloc, said that President Aquino does not need any special powers to address the country’s pressing problems.

“He is so popular and people support him. He does not need an emergency power,” Albano said.

Dela Cruz of the House Independent Bloc of Leyte Rep. Ferdinand Martin Romualdez, said there is no compelling reason for grant of emergency powers to Aquino.

“Why would he need that power? He (Aquino) has enough powers to deal with the situation and Congress has been very supportive if not overly compliant in the provision of resources and other means to deal with the calamities. The problem, in fact, has been the timid and oftentimes problematic way by which the Aquino administration handled the disasters (response) so far,” Dela Cruz said.

Tugna, for his part, said he would support Evardone’s proposal only if there is a valid reason for such.

“It is best to put such a proposal on the table and be subjected to consideration and debates,” Tugna, a deputy majority leader said.

“I support this proposal so as to have a timely potential solution to the aforesaid two escalating problems. Although some may question its unconstitutionality because the 1987 Constitution is very strict in granting vast powers to the President (out of their experience of abuse during martial law),” Tugna said.

Evardone, member of the ruling Liberal Party (LP), lamented that that “the sad state of our power and mass transit facilities which have been the result of long years of neglect has very debilitating effects on our economy and people.”

Evardone underscored the need for the government to fast track the construction of more power plants not only to meet the growing demands of a growing economy and to lower the cost of electricity.

“In the same manner, we need to fast track also the construction of mass transit system in metro manila to arrest the worsening traffic problem and provide commuters a more efficient mode of transport facility,” he said.

In another development, two administration lawmakers on Friday welcomed the Supreme Court’s ruling on the inclusion of several power plant producers in the twin petitions against power rate hike, calling it an “initial victory”.

“This is a welcome relief to consumers battling the soaring power rates at the time when allegations of collusion are very strong,” Barzaga pointed out.

PEMC is the operator of electricity trading flood Wholesale Electricity Spot Market

Tugna of Citizens’ Battle Against Corruption (Cibac)said that any increase in power rate hike “should be temporarily restrained” pending the final legal resolution on the matter. “All interested parties should be made to explain on the impending power rate hike.”

Meanwhile, Barzaga slammed the Office of the Solicitor General for abandoning its mandate to respond in behalf of the ERC and Department of Energy on the power rate petitions before the high court.

He said it was unimaginable when Office of the Solicitor General asked the High Court that the defense of the Energy Regulatory Commission and the Department of Energy be undertaken by the lawyers of Manila Electric Co. instead of the Solicitor General.

The Office of the Solicitor General filed a Manifestation and Motion on January 2, 2014 before the Supreme Court praying that it be excused from filing the Comment on behalf of public respondents—ERC and the DOE, and that the defense of the two concerned governemnt agencies be undertaken by private respondent Manila Electric Co (Meralco).

ALSO: PALACE CAREFUL ON JINGGOY'S PORK REALIGNED FOR CITY OF MANILA

PHILSTAR, MANILA, Philippines - Malacañang yesterday tread carefully on the issue of the P100-million Priority Development Assistance Fund (PDAF) realigned by Sen. Jinggoy Estrada(photo) for Manila which is now governed by his father Joseph as mayor.

Senator Estrada has been linking the PDAF issue to politics, particularly the 2016 elections.

He claims the administration is targeting him to derail any plans to run for higher office two and a half years from now.

Asked why President Aquino did not directly veto Senator Estrada’s PDAF realignment in the 2014 General Appropriations Act even after saying he was for its abolition, deputy presidential spokesperson Abigail Valte said the explanation in the Chief Executive’s veto message would speak for itself.

“If you read the veto message of the President, it’s quite clear. There are items under direct veto, there are items under conditional implementation and the reasons are stated,” Valte said over radio dzRB.

She said people should not read too much into it because “it’s exactly what it is, what it says: it’s conditional implementation.”

There are guidelines that have to be drafted for the utilization of that particular fund. I understand that there are some lawmakers who are saying that they’re interpreting it to be a direct veto but, according also to (Budget and Management) Secretary (Florencio) Abad, it’s not necessarily a veto. That’s why we also have to confer with the legislators to understand exactly the intent behind that amendment,” Valte said.

The “conditional implementation“ phrase, according to lawmakers and political observers, gives the Palace the power to release or withhold the funds, depending on its judgment.

Senator Estrada’s critics said what he did could be legal but it was certainly lacking in propriety or delicadeza since he had been embroiled in the PDAF controversy and the funds would go directly to his father’s local government unit that could compromise check and balance, transparency and accountability.

Senator Estrada has been alleged to have pocketed PDAF or pork barrel funds through ghost non-government organizations created by suspected PDAF scam queen Janet Lim-Napoles.

Other senators defended him, saying the utilization of the funds would be subject to the Commission on Audit (COA)’s scrutiny anyway.

No violations

Meanwhile, Senate finance committee chairman Sen. Francis Escudero maintained yesterday that the Senate and the House of Representatives have not violated any law when some of them allocated their pork barrel funds to certain pet projects or, in the case of Senator Estrada, to the city of Manila.

“There is nothing irregular, illegal or unconstitutional with respect to the budget that we approved,” Escudero said.

He reiterated that the lawmakers even quoted the decision of the Supreme Court on disallowing post-enactment intervention by any lawmaker under the 2014 appropriations act.

“The Senate approved it, the bicam approved it. It was carried and passed by both Houses,” he said in an earlier interview.

Escudero also clarified that he did not say that congressmen have no reason to complain over how senators allocated their PDAF since they also exercised their discretion over their own funds.

He said he may have been misquoted when he said that it is unfair to judge Senator Estrada over his decision.

Escudero said in his previous interviews that senators have agreed to respect their individual decision on what to do with their PDAF.

Nine senators, namely Senators Estrada, his half-brother Sen. Juan Victor Ejercito, siblings Pia and Alan Peter Cayetano, Senators Bong Revilla, Lito Lapid, Ralph Recto, Miriam Defensor-Santiago and Antonio Trillanes IV realigned their allocations. – With Christina Mendez


Chief News Editor: Sol Jose Vanzi

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