Senator Win Gatchalian flagged certain provisions of a proposed measure to develop the country’s natural gas industry, saying those provisions could prove detrimental to consumer interests.

Gatchalian emphasized that while he recognizes the good intent of Senate Bill 2793 or An Act Promoting The Development Of The Philippine Natural Gas Industry to achieve energy security and to encourage investment in the upstream oil and gas sector, certain provisions of the proposed measure need to be revisited.

He specifically highlighted Section 6 of the proposed measure, which allows for the ‘full recovery of reasonable costs’ incurred by power generators—a more lenient standard compared to the ‘least cost’ requirement outlined in the Electric Power Industry Reform Act (EPIRA).

The senator added the proposed measure should ensure that the Energy Regulatory Commission (ERC) can still protect consumers through the ‘least cost’ standard when reviewing power supply agreements.

In the provision of gas supply under Section 21, indigenous natural gas (ING) has a priority over imported natural gas and even electric power produced from ING has priority in generation, transmission, distribution, and supply, even if ING is more expensive than other sources. This is problematic because consumers will be forced to pay the higher price of electricity whenever ING is more expensive.

According to industry sources, the cost of pure liquified natural gas (LNG) at 10.5 US dollars per million British thermal units (MMBtu) corresponds to a levelized cost of energy (LCOE) rate of 7.07 pesos per kilowatt hour (kWh). On the other hand, a blend of LNG and indigenous natural gas (ING), priced between 11.8 to 13.5 MMBtu, corresponds to a rate of 8.4 pesos per kWh.

“Kailangan nating siguraduhin na ang bawat probisyon ng panukalang batas ay magbibigay ng proteksyon sa mga konsyumer at magpapalakas ng buong sektor ng enerhiya para lalong palakasin ang ating ekonomiya,” he ended.