No assurance from DOE of blackout-free elections

By Myrna M. Velasco – August 2, 2021, 6:00 AM
from Manila Bulletin

While power interruptions are often blamed for alleged cheating every elections, the Department of Energy (DOE) has not given any assurance that rotating blackouts will not happen in the May 2022 polls.

When Energy Secretary Alfonso G. Cusi, who is also the president of the Duterte-chaired PDP-Laban political party, was asked on Friday (July 30) in a Congressional hearing if the DOE can guarantee that brownouts will no longer happen between now and in the election period, the energy chief failed to provide a concrete answer.

The DOE Secretary had instead tossed the responsibility of safeguarding a ‘no blackout scenario during the election period’ to the private sector, as he emphasized that they are the owners and operators of the power plants in the deregulated electric power industry.

“DOE has been doing its job, and I would like to say that everything in the energy sector is at the hands of the private sector…we are not running the plants, we are not operating them,” Cusi stressed.

When quizzed by Deputy House Speaker Rufus Rodriguez if the DOE can assure that brownouts will not happen in the coming months and onward into the May election period, the DOE secretary dodged the question. Cusi said there will be need for new investments for additional capacity, and that the wheeling of stranded capacity in the power system will have to be addressed.

Cusi mentioned the more than 2,000 megawatts of stranded capacity in Luzon grid that has to be ‘fixed’ by investments in transmission facilities. In his count, the DOE chief included a liquefied natural gas (LNG) plant that has no certainty yet on its completion date.

“We, at DOE, are not sleeping anymore. When we came in at DOE, we immediately started the LNG (liquefied natural gas) terminals,” he said, specifying that this could add 5,000 megawatts of new capacity. At this stage though, only the 1,200MW LNG power project contracted by Manila Electric Company (Meralco) with the San Miguel Energy group, is seen advancing to commercial fruition.

The energy chief also vouched of 3,000MW of renewable energy (RE) projects already being built, but the RE investors themselves are currently complaining of the DOE’s delayed action on the Renewable Portfolio Standards (RPS) auction, a policy that will underpin the concretization of the DOE-desired investments in greenfield RE capacities.

“In building capacity, we have a lot of regulatory policy issuances that we have made, we are now building 3,000MW of renewables,” Cusi noted, adding that “part of the capacity shortage is because there are stranded power – these are available capacity not being used and have been causing losses to investors.”

Throughout the six-hour hearing of the House Committee on Energy, Cusi has not given any commitment that a repeat of May 31-June 1 rotational brownouts will not recur to torment Filipino consumers again.

On stranded capacity, there is a two-year pending appeal of the RE investors that was recently sounded off by former Energy Undersecretary Jay Layug and that is in need of immediate action so the capacity wheeling problems of these RE plants in the Visayas grid will be resolved, but the DOE bluntly conveyed to them that the department will not act on it.

Even the proactive move of Meralco to augment its supply portfolio via emergency procurement so it can avert supply shortages in the coming months and for the summer election period, is also waiting for a ‘disapproval’ from the energy department as communicated to Congress.

Rodriguez thus asserted further “There has not been enough action by the DOE in being able to really provide the framework, the environment, so that there should have been more power generation of our country.” He also told Cusi “it is not acceptable if the Secretary will just point to another agency to be at fault all the time, because we are seeing that the energy department is really the lead to be able to provide supply of energy and power to the country.”

Cusi retorted “It’s not right to accuse DOE, because DOE is forcing compliance of the industry players to make our energy sector competitive and secure…we are not saying and we are not pointing fingers who is at fault, but we are here to accept our responsibilities and DOE has been accepting the responsibility and facing the challenges.”

On the energy chief’s insistence to force the system operator to enter into ‘firm contracts’ for ancillary services despite lingering supply lack in the Luzon grid, Party List Representative Sergio Dagooc has cautioned DOE to countercheck first if these deals will not result in ‘double charges’ for the consumers; as what had happened in other domains, particularly in Mindanao grid.

Nueva Ecija Representative Rosanna Vergara likewise prompted DOE that its demand for ‘firm ancillary services’ contracting is just a “band aid measure” and will not in any way be a sure-fire solution to the bigger failure of the department on ensuring sufficient supply not just in the coming months and on the election period, but in the short- to medium-term as the economy recovers from the pandemic.

While all industry players now agree on problems of power supply shortages, it appears that Cusi is the last to know that his entire house is collapsing if reckoned on the country’s power supply dilemmas, hence, the problem-fixing stance of the department is still not getting concrete direction until this time.

In fact, Cusi even said that the ‘firm ancillary services’ procurement of National Grid Corporation of the Philippines will have to be underpinned by ‘forward contracting’ – meaning, ancillary services procurement agreements (APSA) have to be sealed or inked already even before the power plants that will supply the reserves will be built; and these could take 3-5 years, hence, the present snags of rotational brownouts could no longer be solved by the prevailing supply insecurity in the power system.