Business groups oppose moves to amend power reform law

Published by rudy Date posted on June 2, 2014

MANILA, Philippines – Businesses are against amending the power reform law under the Electric Power Industry Reform Act (EPIRA) or Republic Act 9136, the country’s business groups said in a position paper.

“Amending or making changes in the EPIRA is not the problem, failure to implement it properly is,” the different business groups said in the position paper.

The signatories are the American Chamber of Commerce of the Philippines, the Employers Confederation of the Philippines, the European Chamber of Commerce of the Philippines, the Financial Executives Institute of the Philippines, the Japanese Chamber of Commerce and Industry of the Philippines, Inc., the Korean Chamber of Commerce of the Philippines and the Management Association of the Philippines.

The business groups stressed the need to build new power plants, adding that if amendments are introduced, it would create uncertainty and turn off investors.

“Brownouts will be inevitable if we don’t build new power plants. International and local investors and financial institutions won’t invest in an industry where the rules are not known and stable. 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,” they said.

The groups cited for instance, the recent changes in the Wholesale Electricity Spot Market (WESM), the country’s trading floor for electricity.

“There were also changes in the rules, such as imposing a cap (50 percent) on the level of output that a Retail Electricity Supplier (RES) can source from its affiliated power generators; and how to count maximum installed generation capacity, which now includes power controlled by RES and results in double counting. These should not be done without full discussion,” the groups said in their position paper.

Instead, the groups urged the Department of Energy (DOE) to improve the implementation of the power reform law. and to call a joint stakeholders meeting to address limits on open access, fiscal independence of the Energy Regulatory Commission (ERC), the power regulator, the price cap at the WESM or the country’s trading floor for electricity and the performance of electric cooperatives and how to improve it.

The business group also calling for a review of the taxes on the industry to consolidate them into a simpler system that may lead to lower prices. –Iris C. Gonzales (The Philippine Star)

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