Report on the Consultative Dialogue on EPIRA Review 2014

Theme: Ensuring Security of Electricity Supply at Reasonable Price

Executive Summary

Republic Act No. 9136 or the "Electric Power Industry Reform Act of 2001" (EPIRA) was enacted into law in June 2001, after more than seven years of Congressional discussions and debates. In recent years, the government was able to comply with all the major reform agenda of power sector restructuring and privatization of the assets of National Power Corporation. However, some sectors – notably the average electricity consumers – have also expressed their disappointment over what they perceived to be the landmark law’s inability to lower power rates and ensure adequate electricity supply.

In response to the public clamor for EPIRA to be reviewed, the Department of Energy (DOE), through its Electric Power Industry Management Bureau (EPIMB), organized and conducted a series of stakeholder consultation on EPIRA review focused on ensuring security of electricity supply at reasonable price. The issues raised during the consultative process revolved around legislative, policy, regulatory and governance matters. Among the widely-discussed issues related to EPIRA were the Value-added Tax, cross-ownership, de-monopolization and shareholding dispersal, open access, WESM rules, and privatization of Agus-Pulangi power plants in Mindanao and granting of authority to the executive branch for immediate action in cases of supply deficiency.

The consumers, labor groups and non-government organizations have taken the extreme stand of calling for the repeal or the abolition of the EPIRA, saying that it has been a complete failure. The business sector, on the other hand, has cautioned against amending the EPIRA, saying that this might send the wrong signals to investors and to financing institutions. The prevailing sentiment among the stakeholders however remains one of sobriety, with majority of them saying that government can still make EPIRA work by amending certain provisions of the law and by improving its implementation. Alongside the legislative reforms, government can also strengthen the roles of concerned implementing agencies like the DOE, and reinforce the regulatory powers of the Energy Regulatory Commission (ERC) to ensure that any forthcoming amendments to the EPIRA will be completely enforced. It is also important to note that the identified priority policy actions to meet the objectives of energy supply security and reasonable price require the full support and cooperation of all concerned government agencies.

The report is divided into three parts: Part I describes the consultative process undertaken by the DOE in connection with the review of the EPIRA; Part II discusses the different issues and proposals that were submitted and/or presented during the series of stakeholder consultations; and Part III deals with the recommendations that can be taken by the government based on the proposals gathered by the DOE following the review. These are classified as either immediate to short-term or medium- to long-term recommendations. Details of the proposals are contained in the Annex 3, "Consolidated Sectoral Issues and Proposals".

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