Press Release
December 11, 2014

TRANSCRIPT OF INTERVIEW OF SEN. SERGE OSMEÑA

Special Powers on 2015 Energy Crisis

Serge: I don't know what they mean by additional generating capacity and I don't know how that resolution would bring it about. But let me read it again.

Kasi sasabihin ninyo, very generally, in order to obtain additional generating capacity we are authorizing the President to do what? Hindi ko nga alam what they are authorizing the president to do. But they are just saying that, we are hereby exempting companies that join the ILP from certain laws. Then there's the VAT law, the Biofuels Act... hindi naman kailangan eh. We don't have to give those exemptions at all.

For example, the VAT has never been a problem. We've had the ILP in Cebu and Davao for 4 years. And the VAT has never been an issue, they pay the VAT. Walang nagko-complain. So, why are we making a problem out of something that is not a problem, hindi ba?

So I really have to study what the House has passed in order to be able to explain to them why certain things that they may have inadvertently placed in the Resolution are not really necessary for the ILP to be a success.

Q: So you don't see the need for a joint resolution at all?

Serge: No, no. the Senate Resolution will also give powers to the President: 1) We might want to exempt from the Biofuels Act the natural gas plant of Kepco-Ilijan because napaka-dumi ng biofuels that they have to clean the plant right after using the biofuel and it takes them 5 days to clean the plant. Sabi ko, that is 5 days of power generation, ayokong mawala iyon. Let's exempt them from that, it's a very small price to pay. And then, (2) we want to keep hold of PSALM kasi ang PSALM po ang magbabayad ng extra storage to deliver diesel to Kepco Ilijan for their 2nd 600MW plant that they would not be operating because they lack storage facilities. It costs less than a million dollars. Eh dapat naman don't let PSALM be left holding the financial bag there. So, we will be authorizing the President to use the Malampaya Fund. Then, (3) there's the issue of delivering fuel to Malaya, the 300MW plant of Malaya that is being currently repaired. Pero, alam niyo this is a technical problem. Kasi noon po, may pipeline going to Shell in Batangas up to Sucat in Muntinlupa. 'Yung pag-close daw ng Sucat, sinara din 'yung block line na iyon. Kaya hindi na daw nagde-deliver ng fuel dun. Ngunit, the fuel that was arriving in Sucat was also loaded into a barge that was brought across Laguna de Bay to the Malaya plant, which is on the other side of Pillila. Nawalan na ngayon ng fuel ang Malaya. Malaya now can only get fuel by barging it up the Pasig River. But the Pasig River has since silted too much that unless we dredge Pasig River, it will be really hard to get the barge up, especially on low tide. Hindi makakadaan ang barge. So magiging kulang po ang fuel feed sa Malaya. We need to dredge Pasig River.

Q: Is there still time to pass joint resolution?

Serge: Yes. PSALM can do it today, if they want to because that is directly under the Office of the President. This just makes it official.. We can pass the resolution authorizing that even on February, they will be perfectly fine. There is no time to pass it this year. And besides, it is completely unnecessary anyway. We'll just pass it next year. If it were necessary, we would have passed it already.

Q: The ILP could directly solve...?

Serge: The ILP's do not need special powers. The ERC has already an ILP program is already in place in Cebu and Davao since 2010 because we were suffering brownouts in Cebu and Davao, so we used the ILP, we did not ask for special powers, we did not ask for money. It is automatic and it works very well. And now they are employing the same principle, the same protocol in Luzon. So, they do not need special powers. Like I said, even taxes are not a problem in Cebu or in Davao. But they seem to think that it would be a problem here.

Q: Pressure sa Senate?

Serge: Wala. I don't know what is the emergency power. Because everything seems to be in place. The ILP is in place. And we have found certain solutions that would expand our reserve power. So, anong hinihingi nila sa House? 750MW? Teka muna. Nakahanap na tayo ng 600MW, plus another 300MW of hydro, plus another 300MW in full peaking plant in Malaya the moment it is fully repaired. Plus the ILP. And in the ILP alone we can already access 1000MW, and that is already de-rated, meaning we expect 1400 MW, at 70% efficiency, it will be de-rated to 1000MW. So we will have sufficient power to say that our reserve of 1600MW will be covered. Now, 'yung hindi ko masagot ho, baka kukulangin iyong 1,600MW. Pwede ho, pero nasa Diyos po iyan. Kapag bigla may planta2 planta o 3 planta na mag-breakdown, wala po tayong magagawa. We cannot predict that, but we know that we are mandated to have reserves of about 1,600MW and we will definitely have that by March.

Q: Magkano ang kailangan from Malampaya funds?

Serge: Not much. Again, I have to get the various costings, but I can estimate that it would be less than a half billion pesos (less than half of P500 million).

Q: Status ng hinihinging emergency power dito sa Senate?

Serge: The status is that we are still trying to get all the details on the cost, and the legalities involved. Like (1) we need exemptions from the Biofuels law for the Ilijan-Kepco, we will get that for them. I should get the quotes already already on the barges, I still don't have yet. Pero kapag sinabi ng Shell na under a million dollars, aba, okay iyon. Then, we also need to get quotes on how much extra costs will be to pump water up the Kaliraya so we can be able to extract an additional 100-150MW of power from the CBK project up there. CBK has a stalled capacity of 750MW, but at maximum they are only delivering 500MW. I asked them ano nangyari sa 150MW, at ang sabi nila, 'Sir hindi maitaas ang tubig dun kasi nagrereklamo ang mga resorts na nalulunod daw sila.' Ang sinabi ko, we have to talk to those resort owners. Because the CBK in Lake Kaliraya was created as a pump storage pump, it was not created as a resort lake. They have to take a backseat to the people's needs for power. That's an extra 100MW to 150MW. We will ask the ERC to exempt the hydro drams in Luzon from December to March from the must-offer rule. Now, the must-offer rule means, kung meron kang power, dapat i-offer mo sa WESM. Ang sabi ng mga hydro owners, especially the ABoitiz group, which have the Magat Dam, the Ambuklao dam, Ambuklao dam, Binga Dam, Mr. Ramon Ang whom I met with last week, they operate the San Roque daw and Lopez group which operates Pantabangan. Sabi nila, if you exempt us from the must-offer rule, then we can save the water enough to give you an additional 100-250MW during summer. So, kakausapin ko ang ERC. 'Please exempt the hydro from the must-offer offer rule so that during summer, we will have more power, so that's another 100-150MW...

Q: Hindi puwede next week?

Serge: You know, joint resolution being treated by media as such an important things. It is not important. the media has been making it such an important things. If the Senate did not pass the joint reso, we will still have the ILP in place. We will still be able to exempt the hydros from the ILP, we will be able to get the cooperation of Ilijan...

Q: Certified as urgent by the president?

Serge: Because the president is being misled. He does not really know power, so he relies on people who don't know power either. But believe me, we will have 1,600MW. If we do not have 1,600MW, that's beyond already the control of the Senate, it's up to God. Masyado ng maraming mada-down during April and May, which are the hottest months. But I think normal outage we will be limited to 3 or 4 brownouts a year. In a situation like ours, because we really have very low reserve power of abour 19%, we expect 3-5 brownouts every year.

In a situation where, like Singapore you have a 50% reserve, not 90, not 20%, but 50% you expect 1 brownout every 3 years.

Iyan ang pangarap ni Osmena

Q: Sa 1,600 MW, may brownout pa din iyon? Yes, meron pa rin, short brownouts. In a normal year, 3-4 brownouts, but short brownouts.

Q: Sa summer possible pa din magka-brownout?

Serge: Yes. But short brownouts. Very short. Maybe 1-2 hours. Depends on the hottest day. Or if by accident, suddenly 3 big plants go down, pumutok ang boiler ng isa..we cannot predict that. Act of God na iyon.

Q: Kepco power plant?

Serge: I informed the PSALM last week. And I spoke to Secretary Petilla yesterday, I said I hope... and he said, Mandy Ledesma (PSALM) mentioned it to him. And I said, here are the additional power that we can expect, at least 500MW, maybe up to 650MW, from Ilijan. And even if you count only 500, that's still 500MW, ang laki. During the hottest months of the year. Then another 200-300 from the hydro. I will talk to ERC and tell them if they can be exempted from the must offer rule. And we will also raise the water level of lake Kaliraya by maybe about 1 meter. Then we also have the dredging of the Pasig River to ensure timely delivery of fuel to the Malaya plant, which is being repaired and which should be operational by April 1 next year. Then of course, we have 300MW from new plants that are going to be activated before March 1. And probably another 250MW by April 1. So all in all, I think we have a comfortable 1600MW of reserve power on the hottest day of our year.

News Latest News Feed