Senate head sees acute energy shortage crisis

The Arroyo administration must take steps now to avert a looming energy shortage in the Philippines and avoid wide-spread outages that last crippled the country in 1992, Senate President Franklin Drilon said on Saturday.

Drilon cited studies showing that the country needs around $5 billion investments to meet the projected 5,200 mega-watts of energy demand by 2007.

The estimate is based on the annual average of 5-percent increase in the gross domestic product.

"The gestation period for power plants is about three to four years, so we must start building them now to prevent rotating brown-outs in 2007 or 2008," Drilon said.

The Philippines was last hit by a massive power shortage in 1992 that crippled the economy due to prolonged outages.

As a response, the President then, Fidel V. Ramos, received a blanket authority to negotiate independent power agreements, which contained controversial provisions such as the take-or-pay clause that required the payment of energy produced although not consumed.

"The result is that we are now paying very high power rates, and we have to pay more. We have learned our lessons," Drilon said.

He said Congress will ask the Department of Energy to report what it is doing or intends to do to attract investors that would set up the generating plants.

"In two to three years we will really be in a big problem. We still have time to do it. Otherwise, we will be scrambling and the effects on our people could not be discounted,"Drilon warned.

He said the new generating plants should comply with the Clean Air Act that would require power plants to secure an environment clearance certificate.