Foreign firms buck Epira amendment

Published by rudy Date posted on June 2, 2014

MANILA, Philippines–Foreign and local business groups bucked proposals to amend the Electric Power Industry Reform Act (Epira), or the Republic Act No. 9136, saying that proper implementation is the better answer to power industry issues.

In a joint position paper sent to the Department of Energy (DOE), the American Chamber of Commerce of the Philippines (AmCham), European Chamber of Commerce of the Philippines (ECCP), Japanese Chamber of Commerce and Industry of the Philippines Inc. (JCCIPI), Korean Chamber of Commerce of the Philippines (KCCP), Employers Confederation of the Philippines (Ecop), Financial Executives Institute of the Philippines (Finex), and the Management Association of the Philippines (MAP) said, “Epira is not the problem, failure to implement it properly is.”

The groups said that sending Epira back to Congress for review would spark sectoral uncertainty potentially leading to a “chaotic system” that could hamper investment and put power needs at risk just when the Philippines needs it to support economic growth.

“Brownouts will be inevitable if we don’t build new power plants,” the groups said, adding that investors will shy away from an industry where 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,” the groups said.

Instead, they said, the government should increase dialogue with industry participants to ease uncertainties. One area that could use clarification, they said, is the basis for recent changes in the Wholesale Electricity Spot Market (WESM) prices and rules, such as imposing a 50 percent cap on the level of output that a Retail Electricity Supplier (RES) can source from its affiliated power generators.

The groups also urged the DOE to call a joint stakeholders’ meeting to tackle other matters, such as: limits on open access, fiscal independence of the Energy Regulatory Commission (ERC), reviewing the WESM price cap, what level of power distribution utilities should be required to contract on a continued basis, how to better monitor and evaluate grid operations, a review of the performance of electric cooperatives and how to improve it, the merits of demand side bidding in WESM and considering revisions to the WESM rules, making the System Operator and Market Operator independent as a merged group, deciding on what to do with the government’s old Malaya plant, privatization of all power plants, improving bidding for new plants to encourage more participants, and reduce disputes, review of the Transmission Development Plan, and a review of the taxes on the industry to consolidate them into a simpler system that may lead to lower prices. –Riza T. Olchondra, Philippine Daily Inquirer

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