I. EXECUTIVE SUMMARY

The 34th Status Report on Electric Power Industry Reform Act (EPIRA) of 2001 implementation covers the period November 2018 to April 2019 which includes significant accomplishments, developments and continuing challenges undertaken by different government instrumentalities and the power sector as mandated under the EPIRA.

The Power Sector Assets and Liabilities Management Corporation (PSALM) continues with the privatization activities of the Malaya Thermal Power Plant and and other remaining plants and National Power Corporation-Independent Power Producer (NPC-IPP) contracts, and the disposal of other disposable assets to include real estate and unserviceable assets, and waste and junk materials. With regard to the reduction in PSALM’s foreign debts, as of 1st quarter of 2019, the remaining balance is down to PhP436.3 billion from the peak of PhP1.23 Trillion as of year 2003 or a decrease of PhP805 billion from the enactment of the EPIRA in 2001.

The Independent Electricity Market Operator of the Philippines (IEMOP) continuously performs its function as Market Operator to include acceptance and evaluation of registration requirements from the Wholesale Electricity Spot Market (WESM) Mindanao participants. Through the Philippine Electricity Market Corporation (PEMC), the DOE continues its mandate to monitor the governance of the WESM through its representation from the different technical committees which undertake regular meetings relative to WESM rules changes, operational audit, conduct of technical evaluation and studies, investigation of breach of the WESM Rules, and management of dispute resolution process. Also, the DOE issued the Department Order No. DO2019-03-0009 entitled “Creating a Special Task Force to Assess the Performance of the Wholesale Electricity Spot Market (WESM) under the Governance of PEMC and Operations of the IMO”, and DC2015- 10-0015 entitled “Providing Policies for Further Enhancement of the WESM Design and Operations” on November 2015 which instigated the move to develop WESM design and operations enhancements.

The DOE, despite the challenges restraining the full implementation of Retail Competition and Open Access (RCOA), continuously exerted efforts in strenghtening competition in the retail market and empower the contestable customers. Hence, despite the restraining orders issued by the Supreme Court on various issuances of the DOE and the Energy Regulatory Commission (ERC), the increase in voluntary participation by Contestable Customers was remarkable at 419% from 239 in June 2013 to 1,240 as of April 2019, comprising around 68% of the total Contestable Customers certified by the ERC.

In terms of the electricity pricing as of March 2019, the country’s average electricity rates as of March 2019 is around PhP8.52/kWh, PhP0.76 centavos higher compared with the December 2018 national average systems rate. Highest increase in rate was posted in the Visayas Grid from PhP6.75/kWh in December 2018 to PhP7.78/kWh in March 2019 or an increase of 76 centavos/kWh. Luzon and Mindanao grid increased by 45 centavos/kWh and 74 centavos/kWh, respectively. To further reflect transparency in electricity rates, the DOE issued Department Circular No. DC2018-09-0026, entitled’ “Adopting the Framework for the Uniform Monthly Electricity Bill Format” to ensure greater transparency in the billing and charges of Distribution Utilities for the utmost protection of public interest.

The country’s power supply-demand scenario in 2018 pose challenges as manifested by the declaration of yellow alerts in Luzon and along with red alerts in the Visayas. Mindanao has improved in terms of having lesser Red and Yellow alert notices in 2018, compared to the previous years due to the development of additional stable capacity from large coal-fired power plants in the grid. While Mindanao supply was relatively stable with the operation of new power plants, the grid was confronted by issues on non-compliance to demand and supply nomination procedures which affected the allocation of capacities in the grid and subsequently resulted to minimal power interruptions in some areas. The country’s 2018 peak demand was recorded at 14,782 MW, which is 993 MW or 7.2% higher than the 13,789 MW in 2017. The total power supply, in terms of installed capacity, grew by 4.8% from 21,730 MW in 2017 to 22,238.15 MW in 2018. Nine Hundred Ninety Three and 6/10 (933.6) MW new capacities were added to the country’s supply based in 2018 which include coal-fired (720 MW), oil-based (87.3 MW), geothermal (12 MW), hydropower (80.3 MW) and biomass (34 MW). Luzon contributed additional capacity by 659.5 MW or 71% and Mindanao at 274.1 MW or 29% while Visayas has not developed any additional capacity for 2018.

The household... Read more