Senate probes unstable power supply in Luzon

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Metro Manila (CNN Philippines) — The Senate Committee on Energy on Tuesday started its probe on why the power supply in the Luzon grid reached the red alert status.

In the hearing, Senators and officials from the Department of Energy (DOE) discussed the absence of proper auditing of power plants — and how much consumers are paying for electricity.

Energy Secretary Alfredo Cusi explained to the senators the red alert status on July 29, August 4 and 5.

According to Cusi, eight power plants were on forced shutdown during those dates — crippling power supply.

"What happened according to our study — because of the May election na postpone 'yung maintenance ng ibang planta," Cusi said. [Because of the May election, maintenance activities for the other plants were postponed.]

"The plants cannot stretch anymore the operating schedule tapos nagkaroon pa po ng mga forced outage." [The plants couldn't stretch anymore the operating schedule, then we also had forced outages.]

Senator Sherwin Gatchalian said because of the unplanned shutdown, the grid lost 2,000 megawatts, almost one-fourth of the requirement for Luzon.

Also read: Blackouts in Luzon possible as power reserves hit zero

The senators also raised concern on the possible collusion among power players — but Cusi stopped short of naming companies.

"We're investigating that as part of due diligence. Everything is possible," said Cusi. "Napaka hirap din naman na mag accuse tayo na walang basis." [It's hard to accuse without basis.]

Energy Regulatory Commission chair Jose Vicente Salazar said it is investigating 13 cases of anti-competitive practices, including collusion.

During the hearing, the senators also pointed out other inefficiencies in energy management.

Senators asked about the absence of a mechanism to audit power plants to check if these are running efficiently.

Cusi said it is looking into institutionalizing measures, like setting up a group, for the DOE to conduct power audit.

Lowering power rates

Cusi said to further lower power costs, there's a need for more investments in the power sector to guarantee enough power supply.

It also plans to remove certain charges that consumers are currently paying for such as the universal or pass-on charges.

The Energy Department wants the Bureau of Internal Revenue to take out the value added tax from the system loss charges, or the operational cost in power generation.

Senator Manny Pacquiao, meanwhile, raised the need to protect the environment in meeting the country's energy needs.

"God want[s] us to be part of the universe that he created, that's why we need to take care of our environment," Pacquiao said.

In the next hearings, the senators will zero in on how to avoid outages — and electricity rates can be lowered.

Studies show compared to other Southeast Asian countries, the cost of electricity in the Philippines remains among the highest.

CNN Philippines' Cecille Lardizabal contributed to this report.

Also read: Power rates might go up due to supply shortage