A REVIEW of the Republic Act No. 9136 or the Electric Power Industry Reform Act (EPIRA) of 2001 should address concerns about cross-ownership and privatization to enhance competition, analysts said.
“We need to strengthen limitations against cross-ownership to foster competition and fair play and lower electricity prices,” Noel M. Baga, convenor of think tank Center for Energy Research and Policy, said by e-mail.
The think tank’s proposed key changes also include reforming the power procurement process and increasing investment incentives to boost competition.
It has also recommended enhancing the regulatory powers of the Department of Energy and the Energy Regulatory Commission.
EPIRA sought to re-structure the electric power industry by privatizing the generation, transmission, distribution, and supply of power.
Under Section 5 of EPIRA, cross-ownership — the concentration of ownership in two or more related businesses — is only prohibited between a transmission company and any company in generation and distribution.
In his third State of the Nation Address (SONA) on Monday, President Ferdinand R. Marcos, Jr. has called on Congress to review EPIRA “to determine if it is still suitable for our current situation or if it is time to amend it.”
Amendments to EPIRA are included in the list of priority bills that both houses of Congress committed to pass before the current session ends, according to the Legislative-Executive Development Advisory Council.
Advocacy group Partners for Affordable Reliable Energy (PARE) said that reviewing the law would be an opportunity to enhance it “by introducing reforms that would lead to inclusive development.”
“A review of EPIRA is needed to determine what reforms should be pursued to resolve issues such as high electricity bills and consistent power outages,” Nic Satur, Jr., chief advocate officer of PARE, said in a statement before the SONA.
“While EPIRA was envisioned as the solution to end all energy issues back then, that vision has not turned to reality,” he added.
Among its recommendations include prohibiting cross-ownership among distribution utilities and power generation companies “to promote competition in the market.”
“The EPIRA law should be revisited but not just to tweak provisions but to actually review the intrinsic limitations of privatization as the main energy strategy,” IBON Foundation Executive Director Jose Enrique A. Africa said in a Viber message.
Angelo Kairos dela Cruz, executive director of the Institute for Climate and Sustainable Cities, said that amending the law is not “warranted at this time.”
“Instead, the most pressing energy issues faced by Filipinos can be more effectively and swiftly addressed by amending implementing rules and regulations and updating the circulars that implement EPIRA provisions,” he said.
He also renewed the group’s call to abolish the automatic fuel cost pass-through provisions in power contracts, which he said, “have burdened consumers financially for years.”
Under a power purchase agreement between a distribution utility and power producer, fuel costs incurred by the producer are automatically passed on to consumers, with the effect that the volatility of world market price are reflected in local electricity pricing conditions.
“While the ambition to increase renewable energy in the mix, as indicated in the Philippine Energy Plan, looks promising, the continued prevalence of fossil fuel operations can still drive up the cost of electricity and set back true progress,” Mr. Dela Cruz said. — Sheldeen Joy Talavera