The Department of Energy is carefully studying the Republic Act 9136 or the Electric Power Industry Reform Act of 2001 or EPIRA to ensure that the more than two-decades old law can keep up with the changing energy landscape while upholding the interest of the consumers.

“Right now there is always a continuing effort to amend the EPIRA so that we can adjust certain parts that may require some tweaking,” Energy Secretary Raphael Perpetuo Lotilla said in a recent interview with reporters.

Lotilla said the EPIRA amendments can be related to the Energy Regulatory Commission’s powers and penalties it may impose and the Philippine Competition Commission’s powers relative to the energy sector.

Clarification

“These are just some of the things that we need to clarify, but even without these amendments within the framework of the existing EPIRA we will proceed,” he added.

The EPIRA passed during the time of former President Gloria Macapagal-Arroyo, mandates ERC and PCC to promote competition, encourage market development, ensure consumer choice, and penalize abuse of market power in the restructured electricity industry.

The law also promotes competition by creating a level playing field, among others, in the competitive retail electricity market.

No foreign-owned enterprises

In a hearing at the House Committee on Energy last week, Undersecretary Sharon Garin, urged that the EPIRA be realigned to ban foreign-owned or foreign government-backed enterprises from engaging in power transmission.

The DoE has drafted a bill backed by lawmakers to include additional paragraphs in EPIRA that would effectively ban the involvement of companies controlled or acting on behalf of foreign governments in the country’s electric transmission business.

Once the bill is passed into law, state-run enterprises currently operating in the country will be forced to divest their investments within 10 years.

Private Electric Power Operators Association president Ranulfo Ocampo, in another hearing on Tuesday, feared that the proposed revisions in EPIRA may push government authorities to compete in the generation sector, which might discourage investments.

Absence of competition

Meanwhile, Meralco’s first vice president and head of Regulatory Management Jose Valles also warned that lower investments in the generation sector can lead to higher electricity prices due to the absence of competition amid fewer players.

Currently, the country’s transmission system is solely operated by the National Grid Corporation of the Philippines, a private company whose 40 percent stakes are owned by the State Grid Corporation of China. The majority, or 60 percent, is controlled by a group of Filipino businessmen led by Henry Sy Jr. and Robert Coyiuto Jr.

NGCP holds a 25-year franchise to solely operate the transmission assets of the government under the Republic Act 9511 signed in 2008.