Since what we are addressing here is a situation that may or may not happen, and if it does happen we are not quite certain of the magnitude and the requirement, whether it is 200MW or 300 MW or 600 MW, the situation or event is perceived to be “temporary” so that the resolutions we are really looking for are “stop gap” remedies, PCCI submits the following proposals and thoughts for consideration:
1. The solution or remedy must be one where the resulting power cost increase would be the least cost and temporary preferably only during that period when the anticipated shortfall will occur.
2. If the plan is for the National Government to subsidize the cost differential such that the consumers shall not be substantially “damaged”, then PCCI is in full support of whatever is decided on PROVIDED it does not promote complacency in seriously addressing and ascertaining the way forward beyond 2016.
3. The measure to be adopted, we respectfully repeat, must be such that it will not distract the leadership from effectively reviewing and addressing the future of the country’s energy and power direction and in developing the appropriate strategy.
4. If the measure being considered is to contract either on lease or direct purchase of capacity for a limited period, PCCI would like to submit that this step or action be endorsed to the qualified or seasoned distribution utility (DU) that is “on the ground”, experienced and knowledgeable on how, when and how much to contract such capacity under the supervision or supplemental guidance of either DOE and or ERC and on terms and conditions preferred by both government agencies. Thinking out of the box, PCCI proposes that this be Meralco, being the largest DU in the country.
5. PCCI is of the view that the least-cost and most workable palliative measure is the full and active promotion of the ILP. There are over 2,000 MW of stand-by generators registered with ERC. To be safe and assured, only about 600 MW is needed to adequately respond to a 300 MW to 400 MW or more supply shortfall. PCCI estimates roughly that by using 400 MW for 5 hours a day using fuel costing say P45 per liter, the resulting power cost increase is only in the vicinity of P0.9 PER KWH FOR THAT MONTH ONLY. There may be no need for subsidy for this and is a win-win situation for the ILP participants and the consumers.
This can be easily achieved with DOE, Meralco and ERC joining forces directly in promoting it. The Office of the President can also complement this effort without need for special power or law.
25 September 2014