The Department of Energy (DOE) is seeking government’s return to power generation business to primarily serve the power system’s requirement for reserves or ancillary services.

Energy Secretary Alfonso G. Cusi said the proposal is anchored on “allowing the government to engage in limited power generation, not to compete with private companies, but rather to augment the energy supply requirements when needed.”

He further explained that the “government power plants are best needed for the reserve capacity of the grid as they will be outside the competition in the electricity market for power supply.”

Cusi similarly noted that if the State will have its own electric generating facilities, it will serve as antidote to the recurrent dilemma of deficient reserves in the electricity system of the country.

However, Energy Regulatory Commission (ERC) Chairperson Agnes T. Devandera contended that there is no absolute prohibition for the government to plunge into power generation ventures — and this is already being done so by Philippine National Oil Company (PNOC), which is a state-owned entity.

Under the Electric Power Industry Reform Act (EPIRA), it was just the National Power Corporation (NPC) that has been prevented from re-engaging into power generation, except for its residual function of providing electricity service to off-grid areas via its spin off Small Power Utilities Group (SPUG) unit.

“We cannot find an expressed provision that prohibits the government to engage in generation…PNOC has generation projects in cooperation with NIA (National Irrigation Administration); and another example is the Rizal hydropower project in Pampanga rive system and this is also by PNOC – this is their RE (renewable energy) project,” the ERC chief stressed.

Devanadera emphasized that the bigger question actually is whether or not the State can still underwrite financing for the development of government-sponsored new power projects.

“Maybe the discussion is on whether or not the national gov’t can still fund the construction of generation facilities. But as to the expressed prohibition, it is the observation of the ERC that there is no such prohibition,” she reiterated.

When it comes to legal question on the government’s plan to get back to power generation, Senate Committee on Energy Chairman Sherwin T. Gatchalian indicated that it shall be discussed separately in a meeting to be convened at the Joint Congressional Energy Commission.

Apart from DOE’s desired plunge into power plant investments, Cusi is also batting for additional powers for his department, so it can impose penalty or take tighter control over industry players, primarily those that are not complying with policies and rules.

He asked the Senate to grant the energy department an “authority to sanction as far as the electric power industry is concerned and to harmonize the same with the regulatory powers of the ERC.”

Cusi expounded such scope of authority must include issuance of measures “to protect the consuming public during a state of emergency,” such as moratoriums on disconnections, grace period on payments; and allowing installment payments on customers’ billings. ###

Source: Manila Bulletin (