JAN.

25, 2015

NR # 3722

Solon seeks creation of an Energy Security Asset program

A lawmaker is strongly pushing for the creation of the Energy Security Asset
program, which shall allow the government to purchase modular generator sets to serve as
backup generators in times of power shortages.
Rep. Alfredo B. Benitez (3rd District, Negros Occidental) said the establishment of
the Energy Security Asset program as provided for in House Bill 5305 would allow the
government to undertake necessary interventions during imminent shortage in power
supply, consistent with the goal of promoting public welfare as well as the countrys
economic development.
Benitez said while the purchase of modular generating system has been excluded as
an option being proposed in the emergency power of the President, it should still be
considered as a serious measure to address future power supply needs of the country.
It is critical for the government to have a backup generator sets which should
promote energy sufficiency in the country security program, which the government
could not expect from the private sector, Benitez stressed.
According to Benitez, chairperson of the House Committee on Housing and Urban
Development, despite the privatization of the energy sector after the passage of the EPIRA
law, it is still the inherent duty of the government to install safeguards if the private sector
supply is not sufficient in order to uphold public welfare and economic development.
Benitez said the Department of Energy (DOE) has recently alerted the public of a
looming power crisis in 2015 because of a projected shortage in power supply.
He said such is the basis of the emergency powers asked by the President of the
Philippines to Congress in order to undertake government interventions within the power
sector to address the projected shortage in power.
Benitez cited the DOE's statement that around 700 megawatts generating capacity is
needed at any given time assuming projected shortfall of 31 megawatts in April plus the
required reserves of at least 647 megawatts. Any shortage in the power reserves meant
shortage in the total power supply of the country, it added.
The bill, otherwise known as the Energy Security Assets Act of 2014, mandates
the Department of Energy (DOE), through the Power Sector Assets and Liabilities
Management Corporation (PSALM), to negotiate contracts for the purchase of additional
generating capacity equivalent to at least 1,000 megawatts to cover the possible shortages
in power supply and/or reserves and forced outages and maintenance of existing power

plants.
However, the modular generator sets to be purchased shall only serve as a backup
generator and shall only be used during Yellow and Red Alert status of power supply,
which modular generator sets shall not be counted as part of all the countrys current
power supply.
The bill also directs the Joint Congressional Power Commission to declare, through
a Joint Resolution, the imminent Yellow and Red Alert status after conducting public
hearings on the matter and that the President shall issue a directive to DOE and PSALM to
use the purchased modular generator sets after the passage of the Joint Resolution in
Congress.
Further, the energy security asset of the government shall be primarily managed by
PSALM and DOE, which shall create a new unit within the agency to oversee the
maintenance of the acquired modular generator sets.
The measure provides that the government should allocate a portion of the proceeds
from the Malampaya Fund included in the Special Accounts under the General Fund 151
of the DOE, to be used to finance energy resource development and exploration programs
and projects of the government for such purpose. (30) lvc