37th Status Report on EPIRA Implementation

I. EXECUTIVE SUMMARY

The 37th Status Report on Republic Act No. 9136 titled “Electric Power Industry Reform Act (EPIRA) of 2001” covers the implementation period May 2020 to October 2020. This highlights significant accomplishments, strategies and policies undertaken by the Department of Energy (DOE), the Energy Regulatory Commission (ERC), the DOE Attached Agencies as well as other private sector instrumentalities so mandated by the EPIRA.

As the country continues to battle the Corona Virus Disease (COVID-19) pandemic which started in the month of March 2020, the DOE and the Energy Regulatory Commission (ERC) continued to adopt and implement authorized COVID19 response and recovery intervention during the community quarantine period in line with the EPIRA and applicable laws and guidelines, to assist and give relief to the electricity consumers in the country.

Despite the pandemic, the power sector continued to accomplish significant developments and battle challenges thru the DOE, its attached agencies and the private sector as mandated under the EPIRA as follows:

  1. With the declaration of failure of the third round of public bidding for the sale of the 650-megawatt Malaya Thermal Power Plant (MTPP) and its underlying land, the Power Sector Assets and Liabilities Management Corporation (PSALM) shall immediately pursue the negotiated process of privatization of the said assets.
  2. There was a reduction in peak demand compared to 2019 level due to the pandemic that hit the three major grids, Luzon, Visayas and Mindanao of about 241 MW from peak demand of 11,344 MW, 23 MW from the recorded 2,224 MW, and 36 MW decline from peak demand of 2,013 MW, respectively.
  3. The WESM continues to operate under normal conditions with electricity demand plus a reserve schedule to gradually regain normalcy and to increase in level since the country’s transition to General Community Quarantine (GCQ). The WESM registered capacity for the month of September 2020 is recorded at 20,207.47 MW, an increase of 15.5 MW compared from a total of 20,191.97 MW registered in April 2020. Of the said total capacity, only about 64% or an average of 12,973 MW were offered in the market. Average market price is at PhP2,621/MWh with the lowest rate of PhP2,040/MWh in May 2020 and highest rate of PhP3,657/MWh in September 2020.
  4. Regarding market share limitations, no power generation entity has exceeded the installed generating capacity and market share limitation of 30% per grid and 25% for the national grid. The country's electricity market reflected a moderately concentrated market indicating a competitiveness power industry in the country;
  5. In relation to the implementation of Retail Competition and Open Access (RCOA), even during the MECQ and GCQ periods, the retail market showed signs of recovery, as there was a recorded increase of 7% on the number of registered Contestable Customers (CCs) as compared from September 2019. 90% of the Contestable Customers (CCs) are located within Luzon and 76% of the total number of CCs are currently being served by Manila Electric Company (MERALCO). While, the National Grid Corporation of the Philippines (NGCP) served the 3% accounted for 33 Directly Connected CC. In retail market performance, MERALCO holds the most number of contestable customers and the largest share of energy sales. The average metered quantity from June 2020 to September 2020 is 1,483 GWh of which 95% of the contracted energy was accounted through bilateral contracts and the remaining 5% was transacted through the spot market.
  6. In terms of electricity pricing as of June 2020, the country's average electricity rate was around PhP8.25/kwh, 22 centavos lower compared with March 2020 level national average system rate.
  7. For the report period, the household electrification level is around 92.96% based on the latest status of energization provided by the National Electrification Administration, Local Government Unit-Owned Utilities and Private-Investor Owned Utilities. Said level corresponds to 23.23 million energized households, surpassing the 22.98 million identified and targeted household population based from the 2015 Census of the Philippine Statistics Authority (PSA).
  8. Finally, in keeping with its mandates under EPIRA, the DOE promulgated three (3) policies regarding WESM Rules and Market Manual and utilization of ER 1-94 Funds which were also published in (3) newspapers for general circulation. Also, around 15 policy proposals are drafted mostly on further amendments to WESM Rules and Market Manual which shall be primarily subject to virtual consultation involving participation of the concerned electric power industry players in the country.

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