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Power failure: 10 years of EPIRA A people’s review on the impact of the Electric Power Industry Reform Act of 2001
Key findings Rates have more than doubled Only three groups now dominate the industry NAPOCOR remained heavily indebted Energy security remained precarious
1. Rates have more than doubled
Factors behind the doubling of rates EPIRA did not cancel the notorious PPA EPIRA introduced new items that jacked up the rates, & it also removed the subsidies EPIRA deregulated power rates thru the AGRA (automatic adjustment of generation rates and systems loss rates) EPIRA introduced investor-biased method to adjust rates – Performance-Based Regulation (PBR)
2. Only 3groups dominate the industry 3 biggest distribution utilities in the Phils.
Due to cross-ownership in distribution & generation… Unbundling of rates has become meaningless Spot market does not foster real competition venue for speculation
3. NAPOCOR remained heavily indebted FROM 2001 TO 2010, NAPOCOR SHELLED OUT $18 BILLION TO PAY FOR ITS FINANCIAL OBLIGATIONS
Reasons for NAPOCOR’s continuing financial woes EPIRA legitimized the onerous supply contracts with the IPPs, consequently: Privatization proceeds failed to cover NAPOCOR’s financial obligations while delays in privatization forced NAPOCOR to continue operating the plants & managing the IPP contracts aggravating its need to seek more debts
4. Energy security remained precarious Rotating brownouts In Luzon, despite excess capacity, due to uncoordinated shutdowns by privately-controlled power plants In Mindanao, due to power supply shortage resulting from lack of additional capacity in the past decade
Causes of energy insecurity Under EPIRA, government turned over its strategic role in planning, developing, and implementing power infrastructure to profit-oriented private sector Small PH energy market is not very attractive to investors unless guarantees and sweetheart deals are offered
Thank you!

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Power failure: Ten (10) Years of EPIRA jun 2011

  • 1. Power failure: 10 years of EPIRA A people’s review on the impact of the Electric Power Industry Reform Act of 2001
  • 2. Key findings Rates have more than doubled Only three groups now dominate the industry NAPOCOR remained heavily indebted Energy security remained precarious
  • 3. 1. Rates have more than doubled
  • 4. Factors behind the doubling of rates EPIRA did not cancel the notorious PPA EPIRA introduced new items that jacked up the rates, & it also removed the subsidies EPIRA deregulated power rates thru the AGRA (automatic adjustment of generation rates and systems loss rates) EPIRA introduced investor-biased method to adjust rates – Performance-Based Regulation (PBR)
  • 5. 2. Only 3groups dominate the industry 3 biggest distribution utilities in the Phils.
  • 6. Due to cross-ownership in distribution & generation… Unbundling of rates has become meaningless Spot market does not foster real competition venue for speculation
  • 7. 3. NAPOCOR remained heavily indebted FROM 2001 TO 2010, NAPOCOR SHELLED OUT $18 BILLION TO PAY FOR ITS FINANCIAL OBLIGATIONS
  • 8. Reasons for NAPOCOR’s continuing financial woes EPIRA legitimized the onerous supply contracts with the IPPs, consequently: Privatization proceeds failed to cover NAPOCOR’s financial obligations while delays in privatization forced NAPOCOR to continue operating the plants & managing the IPP contracts aggravating its need to seek more debts
  • 9. 4. Energy security remained precarious Rotating brownouts In Luzon, despite excess capacity, due to uncoordinated shutdowns by privately-controlled power plants In Mindanao, due to power supply shortage resulting from lack of additional capacity in the past decade
  • 10. Causes of energy insecurity Under EPIRA, government turned over its strategic role in planning, developing, and implementing power infrastructure to profit-oriented private sector Small PH energy market is not very attractive to investors unless guarantees and sweetheart deals are offered