The Experience of the Energy Regulatory Commission Francis Saturnino C. Juan

The EPIRA R.A. 9136 (EPIRA) The BLUEPRINT for the Electricity Industry Restructuring RESTRUCTURING PRIVATIZATION GENERATION DISTRIBUTION SUPPLY OPEN ACCESS & RETAIL COMPETITION PRIVATIZATION PRIVATIZATION TRANSMISSION

R.A. 9136

(EPIRA)

The BLUEPRINT for the Electricity Industry Restructuring

The Power Sector GENERATION TRANSMISSION DISTRIBUTION SUPPLY COMPETITIVE REGULATED REGULATED COMPETITIVE NPC IPPs TRANSCO Private Utilities Electric Cooperatives SUPPLIERS

PRIMARY ENERGY MIX* 2007 Energy Mix is based on 2007 forecast Energy Situationer *From the Department of Energy Imported Oil 33.8% Indigenous Energy 55.8% Ethanol 0.0% Imported Coal 10.3% Coal 3.2% Oil 1.4% Geothermal 22.8% CME 0.0% Other RE 15.7% Natural Gas 6.4% Hydro 6.3% Self-sufficiency level = 55.8% 2006 Self-sufficiency level = 57.20%

POWER GENERATION MIX* Power Situation 2007 2006 2007 Generation Mix is based on preliminary data *From the Department of Energy Geothermal 17.1% Hydro 14.4% Wind and Solar 0.1% Coal 28.3% Oil Based 8.6% Natural Gas 31.5% Self Sufficiency Level = 66% Coal 26.9% Natural Gas 28.8% Oil 8.2% Hydro 17.5% Geothermal 18.4% Wind and Solar 0.1% Self Sufficiency Level = 65%

Interconnection Leyte-Luzon (440 MW) Leyte-Cebu (400 MW) Cebu-Negros (100 MW) Negros – Panay (100 MW) Leyte-Bohol (100 MW) Power Generation as of December 2007* Note: Installed Capacity for NPC/NPC-IPP as per NPC Power Economics Dept. data. Dependable capacity of NPC/NPC-IPP based on 2007 NPC Eligible Generating Capacity as of July 2007 Peak Demand as of October 2007 per TransCo S.O. (Luzon – May, Visayas – August, Mindanao – September) *From the Department of Energy 0.01 1 Solar 18 2,834 Natural Gas 26 4,213 Coal 100 15,941 Total 0.16 25 Wind 12 1,958 Geothermal 21 3,293 Hydro 23 3,616 Oil-based % Share Installed (MW) PLANT TYPE 15,941 1,933 1,833 12,174 Installed Capacity (MW) 8,986 13,479 Total 1,241 1,671 Mindanao 1,102 1,498 Visayas 6,643 10,311 Luzon Peak Demand (MW) Dependable Capacity (MW) GRID

Interconnection

Leyte-Luzon (440 MW)

Leyte-Cebu (400 MW)

Cebu-Negros (100 MW)

Negros – Panay (100 MW)

Leyte-Bohol (100 MW)

Sample Power Bill

Pass-through nature Setting of base generation charge Regulator-approved NPC-TOU rates Recoverable generation cost from IPPs Ex-ante review of PPAs Least cost supply obligation Generation Charge

Pass-through nature

Setting of base generation charge

Regulator-approved NPC-TOU rates

Recoverable generation cost from IPPs

Ex-ante review of PPAs

Least cost supply obligation

Case Background ERC Decision Directive to Renegotiate and Reflect True Cost Unresolved Issues Wind Energy Experience

Case Background

ERC Decision

Directive to Renegotiate and Reflect True Cost

Unresolved Issues

“ Make energy prices reasonable and affordable” “ Intensify renewable and alternative energy use” “ Enhance energy efficiency and conservation” Policy Thrusts of Gov’t.

“ Make energy prices reasonable and affordable”

“ Intensify renewable and alternative energy use”

“ Enhance energy efficiency and conservation”

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