ERC: EPIRA amendments could bring down power costs

MANILA, Philippines — The proposed changes to the Electric Power Industry Reform Act (EPIRA) could deliver the long-awaited solution to soaring electricity costs, according to the country’s power regulator.

“The amendments in EPIRA will definitely help,” said Energy Regulatory Commission (ERC) chairperson and CEO Dimalanta when asked if the changes would alleviate high power costs.

Enacted in 2001, EPIRA reforms and liberalizes the country’s power industry by unbundling it into four distinct sectors – generation, transmission, distribution and supply – to promote greater competition in the electricity market.

Before EPIRA, all aspects of the power sector were controlled by the state-run National Power Corp. (Napocor).

Over 20 years later, President Marcos ordered Congress to review the law and make necessary amendments to those policies that are not applicable for the present time.

In particular, Dimalanta said the ERC is pushing “quite seriously” for the overhaul of its structure, noting that the current setup no longer aligns with the evolving needs of the industry.

“The ERC is currently structured in the same way the ERB (Energy Regulation Board), its predecessor, was structured. The industry has evolved significantly from the pre-EPIRA structure,” she explained.

Unlike before, when the Napocor had acted as the sole generator and utility provider, the power sector now consists of one transmission operator, at least 300 generation companies and over 140 distribution utilities.

“The structure of ERC is not suited to deal with these many stakeholders, so we really need legislation to allow us that flexibility to restructure accordingly,” she emphasized.

Through restructuring, Dimalanta is optimistic that the ERC could be more at pace with the industry, which in turn could help resolve regulatory delays.

“(This) will definitely improve our chances of getting more affordable prices in our power system,” she added.

Last month, Dimalanta said the ERC is proposing an EPIRA amendment to include an emergency power allowing the commission to respond to calamities without needing a quorum.

Under EPIRA, the presence of at least three members of the commission shall constitute a quorum, and the majority vote of two members is needed to adopt any ruling, order, resolution or decision.

“Government agencies, including the ERC, need to respond more quickly (during calamities), and it’s challenging for the ERC to take action as a commission. The system is slow when all five members need to meet to address a situation,” Dimalanta stressed.

EPIRA, the same law that created the ERC, mandates the power regulator to ensure “adequate promotion of consumer interests and customer choice; promotes competition; encourages market development and penalizes abuse of market power.”

The ERC is likewise “responsible for enforcing the implementing rules and regulations of EPIRA.”