Pandesal Forum: Monopolistic Control of Power Supply in the Philippines and its Negative Impact on Consumers

In the recent Kamuning Bakery Pandesal Public Forum,  Cong. Rodante D. Marcoleta of SAGIP Party-List, Ms. Tetchi Capellan Chairman of the Philippines Solar and Storage Energy Alliance Inc., Adolfo “Ka-Ado” Paglinawan PhilBRICS Director, David D’ Angelo President, Green Party of the Philippines together with Mr. Wilson Lee Flores as moderator discussed the Monopolistic Control of Power Supply in the Philippines and its Negative Impact on Consumers.

SOLAR ALLIANCECALLS GOVERNMENT TO BUILD MORE SOLAR POWER PLANTS   

The Philippine Solar & Storage Alliance (PSSEA) called on the Department of Energy (DOE) to issue bigger allocation of solar plants to address the impending shortage in power supply. According to the Chairperson of the Philippine Solar and Storage Energy Alliance (PSSEA) Tetchi Capellan, “the signs of inadequacy in power supply were becoming evident prior to the pandemic.”  

Ms. Tetchi Capellan 
Secretary-General of the Asia PV Industry Association (APVIA), Chairman of the Philippines Solar and Storage Energy Alliance Inc. (PSSEA), and the President of Sun Asia Energy, Inc.

Capellan explained, “when I was serving as Agriculture Undersecretary, the most reliable indicator of food supply adequacy is price signals. This is also true in the power sector. Electricity prices in the wholesale electricity spot market or WESM, were already going over the roof in 2019. This prompted the Energy Regulatory Commission (ERC) to intervene and introduce mitigating measures. During the pandemic, when economic activities were low, ERC continued to address the price surges in WESM by revising the formula that triggers the imposition of price caps.” 

Adolfo Quizon Paglinawan, Director of the Phil-Brics Institute for Strategic Studies and Mr.Wilson Lee Flores

"The less the price of electricity, more investors and entrepreneurs will be attracted to setup new businesses, new offices, new  factories or expand their existing ones" explained by Ado Paglinawan.

Cong. Rodante D. Marcoleta of SAGIP Party-List
Deputy Speaker, Party-List-SAGIP
House of Representatives

According to Cong. Rodante D. Marcoleta  "kinakailangang maging independent  at malakas ang regulatory function po ng ERC. Kailangan mailatag po ang mga kaukulang regulasyon para mapanagutan po natin yung tinatawag na RCOA. Ito po yung Retail Competition and Open Access. Dito po kasi mawawala ang monopolistic power ng  mga distribution utilities kapag nagkaroon po tayo ng mas maraming contestable markets, makakawala po sila sa tinatawag na captive markets. Doon po maaaring magkaroon ng ganansya ang ating mga consumers. Unti-unti pong kakawala ang mga areas na maaaring makakuha po sila ng retailers po electricity at yung mga tinatawag na aggregators. Unti-unti pong mawawala yung monopoly at dito lamang po magkakaroon ng competition sapagkat sang-ayon nga doon sa layunin dapat affordable po yung presyo ng kuryente, competitive in a reign of free competition. Hindi po nangyayari sa ngayon, kaya kailangan ilatag talaga ng ERC ang matibay na mga regulasyon para pumunta tayo  doon sa mga mas marami pang contestable market."

PSSEA highlighted that solar power plants generate most of its electricity during the months of March, April and May and also perform optimally at the peak hours coinciding with the load profile. More importantly, the tariff of solar is significantly lower than the present diesel-run peaking plants. Replacing these expensive fossil fuel plants with more solar power plants will certainly thwart the replication of the exhorbitant market prices in 2014 and protect public welfare. Installing solar plants is fast. They can deliver power and operate within 12 months.  

DOE power outlook this year already forecasted yellow and red alerts in May. The combination of inadequate supply due to lack in new power plants as well as the power outages brought by the 30-year old coal plants will cause this alert to happen. This event is enough for business and industry to worry about especially with the Malampaya gas restriction and the anticipated sharp oil price hikes caused by the Ukraine crisis. This is not to mention the coal export ban to be imposed by Indonesia. All these will bring high prices that will have significant effects on the economy and the population’s well being.

The new government to be installed in June, will face this enormous challenge of low power supply. As the new President assume office, the Alliance calls on the new leasdership to address the power crisis and put energy as its topmost concern in the first 100 days, declared Capellan.