IBON:Why are emergency powers needed to implement ILP?

March 2, 2015

by superadmin

Congress should instead craft law that will replace EPIRA

After the Senate approved today a joint resolution allowing the President to get more generating capacity through the Interruptible Load Program (ILP), research group IBON questioned the need for emergency powers to implement the ILP.

IBON stressed that the ILP has already been implemented in Visayas and Mindanao without requiring presidential emergency powers. In fact, Energy Secretary Jericho Petilla was already broaching the idea of using ILP in Luzon as early as January 2014. The idea then was to mitigate the impact of price spikes in the Wholesale Electricity Spot Market (WESM). There was no mention of needing emergency powers for the President back then, IBON noted.

The group expressed concern that the real intention of granting emergency powers is to promote the interests of big power firms whose projects have been delayed or mothballed because of regulatory and other issues. The House of Representatives’ version, which was approved last December, gives authority to the President to fast-track the construction of power plants by waiving the required technical, financial and environmental requirements of generation companies.

Granting authority to fast-track new plants is among the issues to be consolidated in the bicameral committee hearings, which will start tomorrow. The Senate claims that its version, Joint Resolution 12, does not contain this provision. But according to IBON, this does not mean that it would not appear in the final resolution. The group also added that the public should be wary of the scope of authority that will be approved by the bicameral deliberations.

The ILP scheme involves private businesses such as malls and factories to use their own generator sets (gensets) when power supply becomes critical, supposedly from April to June. In return, government will reimburse them the cost of running their gensets.

Latest data show that at least 30 companies, including the country’s largest mall operators, have already signed up for the ILP. It is not yet decided if the cost of the ILP will be passed on to consumers, but this is reportedly the practice in Visayas and Mindanao. According to IBON, this will spell additional burden for consumers who constantly shoulder the costs of pass-on schemes and guarantees given by the government to private power companies.

The group reiterated that instead of emergency powers, Congress should devote its time in crafting a law that will replace the flawed Electric Power Industry Reform Act (EPIRA). The law has a very narrow framework attending to the interests of private firms to address the multifaceted issues confronting the power industry, including supply and cost issues, IBON said. (end)