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Amending or making changes in the
Electric Power Industry Reform Act (EPIRA) or the Republic Act No. 9136 will
not solve the problems because EPIRA is not the problem, failure to implement
it properly is.
If EPIRA is sent back to Congress for
review, the uncertainty it will introduce into the regulatory regime of the
power industry will lead to a potentially chaotic system, and worryingly put
our future needs at risk at a time when our supply of power is marginal. Brownouts will be inevitable if we don’t
build new power plants. International and local investors and financial
institutions won’t invest in an industry where the rules are not known and
stable. The national government should announce now that EPIRA will not be
amended, as amendment will not solve the present problem, and the government
should increase dialogue with industry participants to reduce key uncertainties
or changing material rules midstream.
For instance, the basis for recent
changes in the Wholesale Electricity Spot Market (WESM) prices was unclear.
There were also changes in the rules, such as imposing a cap (50%) on the level
of output that a Retail Electricity Supplier (RES) can source from its
affiliated power generators; and how to count maximum installed generation
capacity, which now includes power controlled by RES and results in double
counting. These should not be done
without full discussion.
In view of the above, we urge the
Department of Energy (DOE) to call a joint stakeholders meeting to address the
following issues:
1. Limits on open access
2. Fiscal independence of the Energy
Regulatory Commission (ERC)
3. A review of the WESM price cap
4. What level of power distribution
utilities should be required to contract on a
continued basis
5. How to better monitor and evaluate
grid operations
6. A review of the performance of
electric cooperatives and how to improve it
7. Studying the merits of demand side
bidding in WESM and considering revisions to the WESM rules
8. Making the System Operator and
Market Operator independent as a merged group
9. Deciding on what to do with the
Malaya plant.
10. Privatization of all power plants
11. Looking for ways to improve bidding
for new plants to encourage more participants,and reduce disputes.
12. Review of the Transmission Development
Plan
13. A review of the taxes on the industry
to consolidate them into a simpler system that may lead to lower prices
This meeting should include reviewing
the role of each entity involved in the power sector, whether it should retain
the responsibilities it now has, whether these should be strengthened, or
amended or transferred elsewhere.
Finally, we urge the national government
to declare power plants as critical infrastructures or projects eligible for
registration with the Philippine Economic Zone Authority (PEZA) to streamline
acquisition of permits and approvals from all local and national government
agencies.
We believe urgent attention to these and
other issues is called for and we look forward to working together with
government towards an improved power sector.
American Chamber of Commerce of the
Philippines (AmCham)
Employers Confederation of the
Philippines (ECOP)
European Chamber of Commerce of the
Philippines (ECCP)
Financial Executives Institute of the
Philippines (FINEX)
Japanese Chamber of Commerce and
Industry of the Philippines, Inc. (JCCIPI)
Korean Chamber of Commerce of the
Philippines (KCCP)
Management Association of the
Philippines (MAP)
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See also:
Energy Econ 17: Brown outs in Mindanao, Thin Reserves in Luzon, April 11, 2014
Energy Econ 18: Brown outs in Metro Manila?, April 16, 2014
