Marcos admin to push for EPIRA amendments
By Myrna M. Velasco – July 31, 2022, 8:00 PM
from Manila Bulletin
With an instruction from President Ferdinand Marcos Jr., the new leadership at the Department of Energy (DOE) will push for amendments in Republic Act 9136 or the Electric Power Industry Reform Act (EPIRA) that will primarily focus on strengthening the role of the Energy Regulatory Commission (ERC) as well as in synchronizing power transmission investments to avoid stranded capacities in power generation.
Energy Secretary Raphael Perpetuo M. Lotilla noted that the President in his State of the Nation Address pointed out the need for EPIRA amendments that would allow the ERC to “play a more effective role in levelling the playing field for investor and to ensure a competitive market, which is a very important role in order to attract investors.”
The other core policy amendment to be pursued by the Marcos administration will be the strengthening of transmission lines “to avoid the phenomenon of stranded power”.
He chiefly cited the power industry’s experience in Negros island where power could not be exported outside of the island and renewable energy from solar was competing and edging out geothermal. Lotilla described this “a sad case which put up renewables against renewables, that’s why a better synchronization of plans is important.”
Lotilla similarly sounded off plans to ease policy restrictions when it comes to targeted capital flow in the renewable energy sector – primarily that of offshore wind, in which the country had been assessed to have vast potential of more than 70,000 megawatts.
He conveyed that “the vision and the plans for addressing investment restrictions through impactful renewable energy, such as offshore wind, would have to start early.”
When it comes to the reinforcement of ERC’s regulatory powers, previous proposals have called for it to have “financial independence” or for the regulatory agency to raise its own budget from revenues generated through the filing fees and other payments of the entities it has been regulating. ERC’s fiscal independence was seen to steer it away from “regulatory capture proclivity” because if the agency will keep on asking budget from Congress on a yearly basis, politicians could just easily clip its powers.
By the same token, if the ERC’s budget will always be shortchanged in the process of appropriations, it cannot effectively work on all of its mandated functions because it will either be short of personnel or it cannot just easily upgrade its equipment and processes – especially in this era when digitalization is already the norm for businesses and organizations.
On the targeted harmonization of investments on transmission facilities with that of power plant developments, one situation that the government wants is to avoid wastage in energy capacity from massive-scale renewable installations, which had been the case in other markets with high RE penetration.
To ease investment restrictions, the plea of most if not all foreign investors would be to finally allow 100 percent foreign ownership in other RE technologies, primarily solar and wind, where majority of their investment interests are being focused on.
