Looming power crisis and prices

Published September 25, 2021, 6:27 AM

by Atty. Vic Dimagiba

There is a looming power crisis in the supply of natural gas   and resulting high prices for the commodity on thescheduled shutdown of the Malampayanatural gas plant next month.

On that subject, I wrote the chairman of the Senate Committee on Energy on September 21, 2021 and I  submitted that the following actions should be considered, namely:

  1. I reiterate the need for electric cooperatives (ECs) to consider bidding out more of their power requirements from power producers through a competitive selection process (CSP) instead of relying heavily on the Wholesale Electricity Spot Market (WESM).

The Energy Regulatory Commission (ERC) must ensure that there will be no failed biddings when these ECs conduct their respective CSPs. Regulators should supervise the supply imbalance or distortions of ECs that buying more from the spot market when there is another alternative to source power at the least cost for the benefit of the consumers.

  •  The Malampaya contractor, and not theconsumers,should bear the price impact ofthe unplanned maintenance shutdown of the Malampaya Deepwater-to-Gas Power Project last September 11 and 12, 2021 that reduced the generation capacity available to the Luzon grid.
  •  I urged the Department of Energy (DOE) to mandate Shell Philippines Exploration B.V. (SPEX) to give a more detailed report on the gas field’s remaining volume, instead of just asking them to explain the recent shutdown incident. Consumers deserve to know if the Malampaya is still capable of providing gas supply to the gas-fired power plants, as this could push power rates to increase further.

4. On the planned maintenance shutdown in October, the DOE and the ERC should invoke the mandate given to   them by Presidential Proclamation 1218. About 4 years ago, ERC approved a one-time Php 0.66 pkwh (which was billed in 3 installments) increase in Meralco generation charges considering the alternative fuel used were much more expensive over the Shell contract. This should never happen again.

5. The ERC and the DOE can use their extraordinary powers under the Proclamation No 1218 to source funds and to shield consumers from the added cost. Otherwise, the hapless consumers will bear the brunt of an unavoidable power rate hike through no fault on them.

6. Theno disconnection policy and actual meter reading do not help consumers in dire needs of sustenance. This is the __nth occasion where DOE and ERC cannot source public funds for qualified beneficiaries.

7. The Murang Kuryente Act has become the consumers’ conundrum. Consumers continue to pay for stranded contract cost that should   have been stopped as of the effectivity date of the Act in August 2019.              We urge them to look at this date and follow the law.

We hope that any congressional hearing will not end up to be merely sharing and overload of technical data.

The consumersshould no longer be made to absorb higher power rates plus suffer brownouts arising from the Malampaya natural gas shutdown.

On Presidential Proclamation 1218, I wrote to the National Price Coordinating Council (NPCC) that the declaration of the national calamity allows the National Government to monitor and control prices of basic necessities and prime commodities .I said that the following actions should be considered, namely:

  1. Suspension of the implementation of the increases in the Suggested Retail Prices of basic necessities and prime commodities published on August 29, 2021 considering that its effectivity fifteen days after its publication  was preempted by the effectivity of Proclamation No. 1218 on September 13, 2021;
  • Issuance of the Maximum Drug Retail Price Part 2. This has been delayed for almost a year. The  MDRP Part 2 shall add affordable  and  quality  medicines in the list covered by  the maximum drug retail price and  a big savings   to consumers ;
  • Imposition of price freeze or price ceiling on basic necessities and prime commodities   such as rice, local and imported , regular, well milled, commercial and premium ;  liempo and kasim, local and imported; sugar ; chicken , off size, regular size , prime size , vegetables, upland and lowland  and marine products .
  • Continuous /Resumption of sale of NFA rice at P27 and 32 pesos a kilo in all NFA authorized retail outlets;
  • Monitoring and control prices of basic necessities and prime commodities should be coterminous to the effectivity of the Presidents’ proclamation of one year, and not sixty days duration cited in the Price Act, as amended.

My letter was received by the NPCC Secretariat.

Atty. Vic Dimagiba, AB, LLB, LLM

President, Laban Konsyumer Inc.

Email at [email protected]