Business groups buck EPIRA changes

Published by rudy Date posted on May 27, 2014

BUSINESS GROUPS yesterday rejected calls to amend the Electric Power Industry Reform Act of 2001 (EPIRA) to resolve the country’s energy woes, saying the government should instead focus on applying the law.

“EPIRA is not the problem, failure to implement it properly is,” the Employers Confederation of the Philippines, Financial Executives Institute of the Philippines, Management Association of the Philippines and the American, European, Japanese and Korean chambers said in a statement.

“If EPIRA is sent back to Congress for review, the uncertainty it will introduce into the regulatory regime … 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,” they added.

The power interruptions that have been experienced nationwide, the groups said, were inevitable given the absence of new generating plants. They also cited the need for “known” and “stable” rules to lure investors and financing institutions.

“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,” the business groups said.

They also noted that material changes in the power sector should be discussed with the stakeholders before implementation, citing the “unclear” basis of recent changes in Wholesale Electricity Spot Market (WESM) prices as an example.

The Energy department, they said, should call a stakeholders meeting to address the following issues:

• Limits on open access;

• fiscal independence of the Energy Regulatory Commission;

• review of the WESM price cap;

• better monitoring and evaluation of grid operations;

• review of the electric cooperatives’ performance;

• the merits of demand-side bidding in the WESM, as well as other revisions to the market rules;

• actions in relation to the state-owned 640-megawatt Malaya thermal plant;

• privatization of power plants;

• improvement in the bidding process for power plants to encourage more participants and reduce disputes;

• review of the Transmission Development Plan,;

• review of industry taxes; and

• a review of the role of each entity involved in the power sector, among others.

The business groups called on the government to declare power generation projects as “critical infrastructure” or make these eligible for registration with the Philippine Economic Zone Authority, which would allow for the streamlining of permits and approvals.

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