The Market Monitor Minding the Nation's Business
“Dangerously overbroad and fails to address the flaws of the Epira.”
This was how Sen. Miriam Defensor-Santiago described Joint Resolution No. 12 that Malacañang certified as urgent in 2014 seeking emergency powers for President Aquino to resolve the looming energy crisis.
She said the joint resolution, “in its present form, might be an example where the government intervention may create its own failure.”
But despite strong arguments against the resolution, it passed second reading last week in a surprise turn of events. Days earlier, the Senate Committee on Energy, chaired by Sen. Sergio Osmeña, recommended the junking of Malacañang’s special-powers request in favor of ILP. The President is being misled, the senator said. “He (Mr. Aquino) does not really know power, so he relies on people who don’t know power either.” The House of Representatives approved its version of the measure last December.
Epira is the acronym of the Electric Industry Reform Act of 2001 or Republic Act 9136, which was passed during the Fidel V. Ramos presidency to address the debilitating brownouts that characterized his administration.
The Epira aimed to streamline processes in the local power industry by privatizing the assets of the state-run National Power Corp. (Napocor).
Santiago questioned the privatization of the energy industry under the Epira, saying it contradicted constitutional provisions on ownership of natural resources and the Philippines obligations under the international law of human rights.
The senator is considered one of the country’s leading constitutionalists.
“When the management, control, and ownership of the electric-power industry were transferred from the government private monopolies, it was the Filipino power consumer who ultimately suffered increasing costs,” she said.
Santiago said the unbelievably high costs of electricity in the country, among the highest in the world, virtually deprive ordinary Filipinos of civilized means of livelihood and a sustainable standard of living.
Santiago cautioned that a mere legislative resolution is not a legitimate means to fix the flaws of a substantial law.
“What is the rationale of Joint Resolution No. 12? Is it to address a potentially serious short-run problem or is it to amend the Epira? If the former, then it should do that, no more, no less,” Santiago said.
She also said that if the resolution is meant to address an emerging shortage of power in Luzon for the summer months of 2015, it should be simple, easily implementable, and time-bound instead of open-ended.
“The reality is that the government is not a paragon of efficiency and effectiveness. Joint Resolution No. 12, in its present form, might be an example where the government intervention may create its own failure,” the senator said.
“The shortage we are suffering is beyond electric power and go into the crisis of governance,” the senator asked.
Santiago, former chairman of the Senate Committee on Energy and author of the Biofuels Act and the Renewable Energy Act, also highlighted the joint resolution’s failure to include provisions on the adoption and execution of energy efficiency and conservation measures in both the public and private sectors.
“Energy saved is energy earned. This principle is embodied in the House version of the Joint Resolution, but missing in the Senate version. Why?” the senator asked.
She also expressed concern over the cost of the Interruptible Load Program (ILP), even as she agreed that it is a quick and easy solution to the potential energy shortage.
Under the ILP, consumers capable of generating their own electricity may deload from the power grid. With an estimated 3,100 megawatts of private gensets in Luzon, up to 1,400 megawatts may be deloaded during peak hours on certain days.
Santiago noted that with the ILP in place, even without energy conservation, energy savings would be greater than the Department of Energy’s maximum projected shortfall of 1,004 megawatts in Week 14 of 2015.
Malampaya funds
Santiago cautioned against tapping the controversial Malampaya Fund, composed of royalties from the Malampaya natural gas fields off Palawan, to cushion the immediate cost of the ILP.
“The Malampaya Fund, a fund designed for developing new sources of energy for the Philippines, should be used frugally and with caution,” she said.
Amid the investigation of the Priority Development Assistance Fund (PDAF) scam, there have been allegations that some P900 million from the Malampaya Fund went to bogus organizations linked to alleged scam mastermind Janet Lim Napoles.
“The total cost of the policy intervention as envisioned in Joint Resolution No. 12 could turn out to be costlier on the part of the Filipino taxpayers. The taxpayers should know the clear and hidden costs of government intervention,” Santiago added.
Aside from the questioning the proposal to dip into the Malampaya Fund, the senator also probed into the cost to be shouldered by consumers, stressing how one of the responsibilities of the NGCP under the resolution is to recover the cost of the ILP.
“What is the meaning of this? Should private genset owners who deloaded from the grid continue to pay NGCP for the use of the grid? Please explain,” Santiago said.
Luis Leoncio