EPIRA bills seek to promote competition

PROPOSED amendments to the Electric Power Industry Reform Act (EPIRA) of 2001 (Republic Act 9136) are focused on encouraging broader competition in the power industry, according to a co-author of one of the pending bills as well as an industry analyst.

“The introduction of more private power generation companies necessitates policy changes to promote healthy competition for the benefit of our captive end-consumers,” according to Representative Presley C. De Jesus of the Philippine Rural Electric Cooperatives Association party-list.

Mr. De Jesus co-wrote House Bill (HB) 3430, which seeks to impose related-party restrictions on ownership in the National Transmission Corp. (TransCo) or its concessionaire. The parties subject to ownership restrictions in Transco are generation companies, distribution utilities, or relatives of these organizations’ key officials to the sixth civil degree.

The bill also seeks to cap at 15% related-party ownership, operation, or control of the installed capacity of any one grid. For the national grid, the proposed ceiling is 25%.

Mr. De Jesus said EPIRA, as constituted, does not adequately monitor capital expenditure and interconnection, to the detriment of connecting off-grid areas. He hopes to reduce government controls on electricity cooperatives.

The two other bills pending at the committee on energy are HB 4263 and HB 3432.

HB 4263 seeks to cap holdings of any one party in a distribution utility at 15% of voting shares, unless the utility is already listed on the Philippine Stock Exchange.

HB 3432 seeks to shield electric cooperatives and customers from the impact of power users availing of the Retail Competition and Open Access program, which may result in lower-than-expected demand for EC power, effectively raising consumer costs.

Roberto Emilio Hernandez, associate for energy policy at the Institute for Climate and Sustainable Cities, said that the power industry needs policy reform that favors “flexible and distributed generation.”

“Our country’s vulnerability to volatility in the global fuel price and domestic supply insecurity is primarily due to the energy sector’s outdated bias for large-scale, rigid, centralized generation,” Mr. Hernandez said.

Mr. Hernandez added that amendments to EPIRA must consider the current investment environment and developing energy systems and technology.

EPIRA was designed to end the National Power Corp. monopoly on power generation and transmission, introducing private investors to the power generation industry.

Amending EPIRA was designated one of the 12 priorities of Congress after it returns from recess on Jan. 23.

Mr. Hernandez added, “What we need is a genuinely competitive energy market that encourages investment and targeted interventions to dramatically increase the share of renewable energy in the energy mix, establish energy security, and minimize the country’s exposure to fuel price volatility.”

He added that energy regulators must ensure reliable, secure, and affordable power and consumer protection.

“We need to prioritize the use of indigenous renewable energy sources, promote genuine competition in the energy sector through the abolition of automatic fuel cost pass-through, and create an enabling environment for all renewable energy players to participate,” Mr. Hernandez said.