Overview of the Philippine Electric Industry

1
Overview of the Philippine Electric Industry
2
Governance Pre-EPIRA

• Civil society participation in pre-EPIRA stage
• separate hearings per sector
• most consumer groups and other advocacy groups
  mostly against its passage
• bias FOR big industries and AGAINST consumers
  (bear the brunt of the cost)
• increase in electricity rates while there will
  be a decrease in the quality of service
• foreign ownership of utilities as forms of
  neo-colonialism

• Pay-off scandal
• Php500,000.00 per legislator
• some admit to and others not

3
Governance Post-EPIRA

• PGMAs 10-point plan to address issues of
  transparency, accountability, power cost
  reduction, efficiency, cost competency and fair
  market competition

• True cost of service (question of
  transparency)
• Rates unbundling as reflective of the true cost
  of service
• Caveat former PPA hidden in the generation,
  transmission, distribution and supply charges as
  reflected in the billing statements
• Rates unbundling criteria/formula of the ERC
  not available for public consumption
• IPP review and renegotiations done behind
  closed doors guidelines not clear lack of time
  as an excuse to questionable decisions made
• Universal charge inefficiency of ECs passed on
  to consumers

4
Governance Post-EPIRA

• Occasional petition for rate increase on the
  part of NPC and Meralco (question of
  transparency and public awareness)
• ERC not willing to divulge information as to
  how often they can petition for such increases

• Contract violation leading to double billing
  (question of accountability)
• Meralcos breach of the CSE ? reduced
  utilization of NPCs power plants ? higher NPC
  rates ? burden on consumersc

• Performance standards for ECs
• Enhancement of ERCs technical capabilities
  through capacity building programs provided by
  the USAID

question of efficiency
5
Governance Post-EPIRA

• WESM plans being laid out and put into place
  (question of fair market competition)
• appreciation programs for different
  stakeholders (government, private entities, civil
  society)

• Monitoring and evaluation system (Power
  Tracker)
• updates on EPIRA reform activities
  (transparency and accountability)
• database on performance indicators (efficiency)

6
Opportunities and Challenges

• Under the WESM
• More customer options
• Costs reduction
• Economic gain (increased employment and
  productivity)
• Welfare loss due to removal of subsidies

• Geographic setup
• Potential for NRE sources utilization
• Increased private sector participation
• Market-driven industry
• Willingness vs. capacity to pay
• Rates fluctuation
• Agency cooperation
• Confidentiality vs. transparency

7
Salamat at magandang araw!
Yolando T. Velasco UNFCCC Secretariat Email
yvelasco_at_unfccc.int
Zarky C. Pilapil Energy and Environmental
Training Program Email zpilapil_at_eudoramail.com