Priority and mandatory indigenous gas use means expensive electricity

Consider these three provisions from three energy laws.

- BIENVENIDO S. OPLAS JR.

“Section 23. Functions of Distribution Utilities... A distribution utility shall have the obligation to supply electricity in the least cost manner to its captive market...” (RA 9136, EPIRA, June 2001).

“Section 1. Guiding Principles... Competitive Selection Process (CSP) in the procurement of PSAs by the DUs... Ascertain least cost outcomes...Protect the interest of the general public.” (DOE DC 2015-06-008, “Mandating all Distribution Utilities to Undergo Competitive Selection Process in Securing their Power Supply Agreements (PSA),” June 2015).

“Section 21. Natural Gas Supply... Procurement and utilization of indigenous natural gas, including without limitation, by gas-fired power plants, shall be prioritized over imported natural gas...Power produced from indigenous natural gas shall have priority over other conventional energy sources... requiring electricity suppliers to source a portion of their energy supply from power plants that use indigenous natural gas and determining the appropriate minimum percentage of the power generation mix that should be supplied by...indigenous natural gas.”

That is from Senate Bill 2793 and Senate Committee Report 304, the “Philippine Natural Gas Industry Development Act.” August 2024.

Notice the big difference? In provisions (1) and (2), “least cost” for the consumers is the overarching goal, with no mention of where the power supply will come from. In (3), the least-cost provision is absent and ignored, and indigenous natural gas (ING) will be prioritized over imported gas and over other conventional sources like coal.