Next administration needs a new energy framework
Posted by akosistella on March 16, 2010
By Ernesto Herrera
CITING errors in the government’s management of the energy sector amidst a nationwide electricity shortage, the report of Maitet Diokno Pascual of Freedom from Debt Coalition which was published in the Manila (Sunday) Times yesterday, made it clear where the blame lies.
Contrary to what the administration says, the energy crisis is man-made and not God-given. “Consumers in Mindanao, Visayas and Luzon should worry that electricity will become more expensive and less stable in the years to come, not because that’s how God wants it, but because a very flawed law—EPIRA and incompetent energy bosses—govern the power sector,” the FDC report said.
EPIRA, of course, is the Electric Power Industry Reform Act (Epira), which was signed into law by President Arroyo to rationalize the power supply sector and lower electricity rates. It was enacted back in 2001, shortly after GMA took over and has obviously failed to live up to its billing and intentions.
Well, as we have seen far too many times in this country, having a law in place to serve a good purpose is one thing, but having that law properly implemented is another.
The government has to be capable of not only properly implementing Epira but also recognizing and rectifying its errors. Expensive electricity, repeated outages, rationing of electricity, all these show that the implementation of Epira is far from ideal.
The Freedom From Debt Coalition is even calling for a new framework altogether, one “that makes electricity available to all households and enables the power sector to stimulate the development of vibrant local economies.”
But what should government do for the meantime to increase electricity production and promote energy conservation amidst a national shortage?
The FDC article makes it clear that better government management is paramount.
In the coming days, you could expect government to come out with directives like reducing the operating hours of government offices or businesses like shopping centers, or offer rate incentives to reduce electricity consumption in homes and businesses.
But such measures, although helpful would not address the root of this electricity crisis, or for that matter, future power crises.
As FDC said in a statement: “EPIRA did not remove the crooked syndicates, the oligopolists, the political power players, the big business groups, both local and foreign. It did not put an end to rent-seeking, deal-making, price manipulation and market abuse. It did not require an independent and non-politicized and highly competent regulatory body. It did not create a level playing field. EPIRA did not empower consumers.”
The government must increase the direct participation of consumers in the management of the electricity sector. It is not good enough to blame unusual natural conditions.
The power industry has suffered from poor management, misguided policies and serious corruption, even as energy production costs continue to rise with the price of gas and coal.
The continuing electricity shortage poses no significant political risk to GMA at this time. She’s on her way to Congress. The rains will probably come before people come out into the streets to express their anger.
One only hopes that this administration for once is telling the truth that the power crisis would not affect the coming elections.
But assuming that the election does push through, the new administration would face the unenviable task of mitigating the pain of further power outages.
It must ensure that this country gets out of this perennial near-crisis energy situation mode.
The problems in the energy sector have been building over many years and what we’re seeing now is just the culmination.
Labor warns of Mindanao job losses
The Trade Union Congress of the Philippines (TUCP) has warned of severe job losses as a result of the crippling power shortage in Mindanao, which has been hit by daily rotating brownouts lasting eight to 10 hours.
Industries reeling from recurring brownouts in Mindanao are already aggressively carrying out coping strategies that include fewer work shifts and the rotation of workers.
The Department of Labor and Employment should step in and find ways to mitigate the plight of workers displaced by the brownouts, and extend them emergency assistance.
Among the power-intensive industries being hit hard by the brownouts are steel and cement manufacturing, canning, commercial fishing (particularly cold storage), mining and quarrying, food processing, telecommunications and retail trade.
Mindanao risks not just temporary but long term economic losses. We’re afraid Mindanao’s ability to draw incremental foreign and local investments, and create badly needed new jobs, could be impaired if the power shortage there is not fixed right away.
The government should move fast and forcefully to address the shortage. If necessary, extra power barges should be deployed.
Also, subsidies out of a special fund should be made available preferentially to private sector projects meant to quickly harness Mindanao’s potential renewable energy sources. I refer particularly to the trust fund established by the Renewable Energy Law of 2008. Portions of the fund may be used as grants, loans, equity investments, loan guarantees, insurance, counterpart fund or other forms of financial support to new biomass, solar, wind, hydro, geothermal and ocean energy projects installed by the private sector.