Amend Epira to strengthen ban on power sector conflict of interests

Two lawmakers and authors of a bill amending the Electric Power Industry Reform Act (EPIRA) are appealing to fellow lawmakers to speed up on their proposed measure to strengthen the ban on conflict-of-interest in the power industry.

Rep. Caroline Tanchay stressed that the EPIRA had allowed so-called cross-ownership among players in the power industry but this has been prone to abuse.

Tanchay co-authored House Bill (HB) 174 — “Act Prohibiting Cross Ownership Among Distribution Utilities and Generation Companies” — with Rep. Rodante Marcoleta. Both Tanchay and Marcoleta belong to the SAGIP Party-list.

Amend Section 5 of EPIRA

It seeks to amend Section 45 of the EPIRA which allowed cross-ownership of distribution and generation facilities in the power sector.

The provision, in its current version, allows distribution utilities to source a maximum of 50 percent of its electric supply from an “associated firm.”

“Simply put, if both the distribution utility and the generation company are controlled by one entity, they are to be considered as associated firms,” said HB 174.

But the implementing rules and regulations (IRR) of EPIRA expanded the definition of associated firms which allowed “private power firms to circumvent the already generous cross-ownership limitation in EPIRA.”

“The approval of this measure is earnestly sought,” Tanchay and Marcoleta said, in the bill’s explanatory note.

Eliminate cross-ownership

“This bill seeks to avoid this monopoly altogether by eliminating the allowance for cross-ownership in EPIRA and by adjusting its IRR accordingly,” HB 174 stated.

“The prohibition on any form of cross-ownership will remove the conflict of interest among distribution utilities and generation companies, allowing a level playing field for all stakeholders,” they stressed.