DOE orders power generation firms to ensure supply amid COVID-19 vaccine rollout

Robie de Guzman   •   March 4, 2021   •   510

MANILA, Philippines – The Department of Energy (DOE) on Thursday directed all generation companies and other power stakeholders in the country to ensure reliable and stable electric supply amid the government’s rollout of COVID-19 vaccines.

In an advisory dated March 2, 2021, Energy Secretary Alfonso Cusi ordered power generation companies, as well as government-owned and -controlled corporations and private sector-operated generation facilities to undertake the following measures:

  • Ensure availability of generating facilities at the maximum dependable capacity
  • Compliance with the Grid Operating and Maintenance Program for 2021
  • Manage the water reservoir to have optimal production of hydroelectric power plants when they are most needed
  • Secure adequate fuel supplies and maintain reasonable fuel inventories
  • Arrange for back-up personnel in power plants and additional maintenance crew to assist in case of emergencies
  • Augment security forces in major power plant installations, as needed
  • Ensure that emergency response protocols and business continuity plans are updated to include utmost prioritization of COVID-19 vaccine cold storage facilities and healthcare facilities in cases of power outages
  • Provide necessary support for COVID-19 vaccine cold storage facilities and healthcare facilities installing their own back-up power supply, as needed
  • Coordinate with concerned local government units regarding the locations/stations of cold storage facilities for COVID-19 vaccines

The DOE said the recently released advisory complements the earlier directive to the Distribution Utilities issued on February 16.

“The DOE is working non-stop to establish an uninterrupted supply of electricity services at the onset of the vaccine rollout by the end of Q1 of 2021. We have been meeting with the members of the energy family to fortify our strategies,” Cusi said.

House panel supports DOE’s appeal to amend oil deregulation law

Maris Federez   •   October 25, 2021

MANILA, Philippines — The House Committee on Energy supports the suggestion of the Department of Energy (DOE) to amend the oil deregulation law.

The DOE believes that amending the law is the only solution to curb the consecutive increases in the price of petroleum products.

The panel also wants the government to closely look into the reasons for the price hikes being implemented by oil companies.

It also wants the government to be given the power to solve such price hikes.

House Committee on Energy chairman Representative Juan Miguel Macapagal Arroyo said oil companies should not use the oil deregulation law as a blanket authority to increase the price of their products at the expense of the consumers.

“I welcome the proposal of the DOE to amend the Oil Deregulation Law after oil prices escalated over the past eight weeks. As chairman of the House Committee on Energy, I have long pushed for a special mechanism to prevent overpricing in emergency situations,” Arroyo said.

“The Oil Deregulation Law does not give oil companies blanket authority to take advantage of consumers,” he added.

Bayan Muna Partylist Representative Carlos Zarate, meanwhile, urged the DOE to support House Bill 4711 which aims to amend the said law.

“We now challenge Department of Energy Sec. Alfonso Cusi to ask Pres. Duterte to certify House Bill 4711 to again regulate the downstream oil industry as well as the unbundling of oil prices that we called to be done since 2018,” Zarate said.

In an interview, Cusi said that he had already written the Department of Finance to suspend the imposition of the excise tax on petroleum products.

The House panel said it will set a hearing on the said amendment and would invite representatives from the DOE and the DOF. —/mbmf (from the report of UNTV Correspondent Nel Maribojoc)

Pacquiao, Cusi face off in Senate; Gatchalian ousts Matibag from budget hearing

Maris Federez   •   October 21, 2021

 

MANILA, Philippines — The Senate Finance Subcommittee hearing on the budget of the Department of Energy on Thursday went sour as Senator Manny Pacquiao took the floor to question DOE Secretary Alfonso Cusi.

Pacquiao and Cusi are members of two opposing factions of the Partido Demokratiko Pilipino-Lakas ng Bayan (PDP-Laban).

In the committee hearing, Pacquiao asked Cusi about the alleged “tongpats” or markup in the Wholesale Electricity Spot Market (WESM).

The lawmaker also questioned why the Philippine Electricity Market Corporation (PEM-C) remains as a market operator despite the existence of the Independent Electricity Market Operator of the Philippines (IEMOP).

“Nakita natin kung paano sinindikato ang mga nasa kapangyarihan ang EPIRA law. Kung yung trabahong para sa isa ay ginawang dalawa kaya doble doble ang bayarin ng mga consumers,” Pacquiao said.

Cusi then explained that PEM-C still manages IEMOP which was created in 2018 as part of the transition stage.

The DOE official also denied the alleged corruption and insisted that they abide by the regulations set by the Electric Power Industry Reform Act of 2001 (EPIRA).

“Wala pong corruption. Bakit po ang capitalization ng IEMOP is only 7,000? Kasi nga non-profit, non-stock corporation […] Wala pong kinikita yan,” Cusi said.

“Ito pong sinasabing accusation na ganyan, masakit din po ano. And I hope it can be done outside the walls of Senate at kung may kailangan ikaso, ikaso,” he added.

Pacquiao also questioned the alleged relationship between Attorney Matibag who is the president and CEO of the National Transmission Corporation (TransCo) and PEM-C, which Matibag himself answered.

“If Sen. Pacquiao only read the EPIRA Law, buo ang kwento nito eh. TRANSCO noon ang operator muna, bago nag PEM-C […] Wala na TransCo diyan. Alam niyo let’s call a spade a spade dito sa hearing na ‘to. This is all political, Sen. Pacquiao. Alam naman natin to, ito yung pinapasabi mo nung bago ka umalis eh. Na sinasabi mo meron kang pasabog,” Matibag said.

This resulted in a heated argument between Pacquiao and Matibag.

It was at this juncture that Senator Sherwin Gatchalian who chaired the committee stepped in and dismissed Matibag from the hearing.

“This is my committee and you have no right calling this hearing a political hearing. The senators are entitled to ask policy questions,” Gatchalian said.

“You’re out of order. You’re no longer recognized. We’ve given you a chance to answer the policy questions but instead, you insulted this committee by calling it a political hearing. Hindi naman fair ‘yon,” he added.

Pacquiao also slammed Matibag’s action.

“Bastos itong si Atty. Matibag eh. Sayang yung pagka-lawyer niya, eh parang walang pinag-aralan,” he said.

“Wag po kayong mainit, wag po kayo magagalit sa’kin katulad ng ginawa ni Atty. Matibag […] Nabastusan ako,” he continued.

Cusi, on the other hand, apologized on Matibag’s behalf.

“I have to apologize for the interaction if you were offended by Atty. Matibag. I have to make that apology considering that he comes from the DOE family, so my apologies,” he said.

The committee set another hearing for the budget of the other attached agencies of the DOE. —/mbmf (from the report of UNTV Correspondent Harlene Delgado)

DOE asks Congress to amend Oil Deregulation Law

Robie de Guzman   •   October 20, 2021

The Department of Energy (DOE) has called on Congress to amend provisions in the Oil Deregulation Law to allow the government to address oil price hikes amid high global demand and tight supply.

In a letter addressed to Senator Sherwin Gatchalian and Pampanga Representative Juan Miguel Arroyo, the DOE asked Congress to amend the law “to provide a framework for the government to intervene in the sudden, prolonged oil price spikes, including the unbundling of the cost of petroleum retail products to determine their true and passed-on costs.”

Gatchalian chairs the Senate Committee on Energy, while Arroyo heads the counterpart panel in the House of Representatives.

The DOE cited several reasons for the prolonged oil price spike amid continuing rise in world market prices resulting from the sudden global increase in demand and an unanticipated lack of supply.

It said that the demand, which is estimated at 103.22 million barrels a day (as of October 16, 2021 vs. a supply of 100.32 million barrels/day) is attributed to the following:

  • the surge of economic activities due to the containment of COVID-19 as a result of measures adopted and implemented worldwide (i.e. mass vaccination, control of the Delta and other variants, Europe’s “no-lockdown” policy, and China’s economic boost). This led to a sudden demand in energy utilization, including the demand on oil products in the transportation sector like gasoline and diesel;

 

  • the stocking of petroleum products’ inventories as winter approaches to cover demand from October this year to March of next year, with stocking expected until February 2021;

 

  • slowed production due to the current global direction of sourcing energy from low-carbon emitting sources. This has limited the optimum level of production, causing the halt and event withdrawal of investments in the development and expansion of the fossil fuel industry;

 

  • International sanctions to oil-producing countries like Iran and Venezuela that stopped the drilling of oil companies and the buying of oil products from these countries;

 

  • Hurricane Ida a category 4 storm that hit the US gulf coast on August 29 had caused an estimated loss of US crude oil production by as much as 30 million barrels.

 

Before the pandemic, the latest recorded total worldwide supply was, more or less, 104 barrels a day.

To cope-up with the supply, the DOE said the Organization of Petroleum Exporting Countries (OPEC) committed to increase the production and supply of crude oil by 400,000 barrels/day.

The OPEC will meet on November 4 to discuss and reassess the situation.

The DOE said the Philippines utilizes the equivalent of 425,000 barrels/day, which is around 0.4% of the world supply.

The department assured it has met with the oil industry stakeholders to ensure supply while the problem persists, and asked if discounts could be extended to the public, especially to the public transport sector.

“Supply was assured and some companies (e.g. Jetti, Seaoil, Shell, Phoenix, Unioil) agreed to extend discounts to the public transport industry on top of existing discounts currently given like vaccination and loyalty incentives,” it added.

The DOE said it required the unbundling of the cost of retail products to determine their true and passed-on cost.

It maintained that the unbundling of oil prices would result in greater market transparency by establishing the trends in the prices of oil and finished petroleum products.

This, in turn, would help ensure a level playing field within the oil industry, while upholding the best interests of consumers, the DOE said.

 

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