ON Friday, Sept. 11, The Manila Times held our long-awaited roundtable, “Epira at 25: What needs to change to secure the Philippines’ energy future?” and I can honestly say it was the most fun I’ve had in months. I can also say that I am big nerd, and I have no problem with that. As I said in my opening remarks, energy is the glue that holds the economy together, and with it, the aspirations for well-being and progress for the nation as whole, and every Filipino individually.
I am still digesting the figurative tsunami of ideas and information that emerged in the discussion, and in any case, I would not do it justice to try to cram it into one column. The details will provide me commentary fodder for weeks, but for now, I would like to pick up where I left off at the close of the event, and share some of the broad takeaways I got from the conversation.
First, I was very happy that we were able to assemble a broad representation of almost every stakeholder in the energy sector. Energy Regulatory Commission (ERC) Chairman and Chief Executive Officer Francis Saturnino “Nino” Juan was there for regulation; the distribution sector was represented by Meralco Executive Vice President and Chief Operating Officer Ronnie Aperocho, as well as lawyer Richard Nethercott on behalf of the Negros Electric and Power Corp.; the electric cooperatives were represented by Janeene Depay-Colingan, executive director and general manager of the Philippine Rural Electric Cooperative Association (Philreca); the generation sector was represented by Gerry Magbanua, president of Alternergy Holdings; Elvin Hayes Nidea, president of the Philippine Electric Market Corp. (PEMC) represented the market sector; Jacqueline Castillo, president and CEO of Mabuhay Energy Corp., represented the retail electricity supplier (RES) segment; and Nic Satur Jr., chief advocacy officer of the Philippine Alliance for Affordable and Reliable Energy (PARE), represented the consumer segment.
The only ones missing were the Department of Energy (DOE) itself, which would have represented the policy side, and either the National Grid Corp. of the Philippines (NGCP) or the Transmission Corp. of the Philippines (Transco), or both, representing the transmission sector. The latter two get a pass because I happen to know there were scheduling difficulties. But the DOE, I think, was avoiding me. Frankly, that may have been a good call on its part.
OK, enough of the society page stuff, but I wanted to mention everyone because I am most appreciative of their taking the time to join the roundtable, and I look forward to having further productive discussions with all of them.
Without further preamble, these are the five major points that I think emerged from our discussion.
One, Epira — the Electric Power Industry Reform Act of 2001, as it’s more formally known — should not be regarded as a failure because it did what it was supposed to do. It got the government out from under an untenable framework for providing energy to the country, stopped the financial bleeding, and led the country to a level of maturity in the power sector. However, there is a common perception that what is needed now is something to take energy to the next level; the phrase “Epira 2.0” was repeated several times, and now seems to have stuck. Thus, it seems inevitable that some significant amendment to the existing law needs to take place. Whether that means scrapping it and rewriting a brand new law, or just applying fixes to what already exists is something that still needs to be worked out.
Two, a couple of the core principles of the original Epira, namely privatizing government generation assets and prohibiting cross-ownership among generation, transmission and distribution enterprises need to be abolished. Or if not abolished, be retooled to make them more flexible as the circumstances dictate. In this, preserving competition is key, but there are sufficient tools in place, if they are used correctly (such as the oversight from the Philippine Competition Commission), to ensure that.
Three, planning, policy-setting and, to some extent, regulation need to proceed from a holistic approach, including all stakeholders — generation, transmission, distribution, markets and consumers — to maximize efficiency and achieve the best cost. By extension, that means that changes to Epira must be handled the same way. The DOE should not be launching auctions for arbitrary amounts of capacity for certain forms of generation, for example, unless those auctions are based on inputs from everyone concerned to ensure that the capacity sought is the right amount, in the right place, with sufficient connective infrastructure available or easily provided, and capable of being delivered at a fair cost. This is not really happening now, and the framework for making it happen is something that needs to be codified in law.
Four, the government needs to seriously reconsider the energy cost penalty it imposes on consumers in the form of pass-through subsidies, and excessive taxes. No government intentions to reduce energy costs is credible unless this giant elephant in the room — amounting to 15 to 20 percent of customers’ monthly bills — is addressed.
Last, but certainly not least, as it is one of the first critical points offered by ERC chief Juan, the government must reexamine its state policies regarding energy as codified in Epira — there are 11 of them — and determine a rational order of priority, combining or eliminating those that are contradictory. Put another way, in crafting Epira 2.0, the starting point should be a clear understanding and agreement among all stakeholders about what the law should accomplish, with the work proceeding backward from there. The first version of Epira actually did that, but the energy sector, its associated technology, and the market it serves have all evolved far beyond that. For a new version to succeed, it has to be both up-to-date and flexible enough to accommodate future evolution.
ben.kritz@manilatimes.net
Bluesky: @benkritz.bsky.social
Website: www.badmannersgunclub.com
