Senators propose amendment to Epira law

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Wednesday, December 11, 2013

SENATORS are proposing amendments to the Presidential Decree (PD) 910 or the Electric Power Industry Reform Act (Epira) as they expressed doubt on the reported shut down of eight power plants in Luzon.

Senator Sergio Osmeña III on Wednesday said he cannot believe that such a coincidence will happen. Energy Secretary Jericho Petilla agreed, saying the timing was suspicious.

Osmeña said that it was too much of a coincidence for eight power plants to shut down all at the same time.

In his proposal, Osmeña III urged Malacañang to utilize a small portion of the Malampaya fund to subsidize the estimated P10 billion in additional generation costs that households in Metro Manila and neighboring areas are expected to pay over two months to cover the P4.15 per kilowatt hour (kwh) increase in the generation charge of the Manila Electric company (Meralco).

Osmeña, who is the chairman of the Senate committee on energy and co-chairman of the Joint Congressional Power Commission (JCPC), said President Benigno Aquino III could tap the more than P130 billion balance in Malampaya funds to cover the amount.

"The Malampaya fund has gotten very fat. It is time that it is used to ease the burden of power consumers," Osmeña said.

He also said, "If the law establishing the fund (Presidential Decree 910) has to be amended, we can do that in two weeks. All the President has to do is to certify the bill for prioritization."

Earlier, Senator Antonio Trillanes IV filed Senate Resolution 411, which seeks to investigate the Meralco power rate hike.

Trillanes said that there are reports of alleged collusion among power plants resulting into an unusual number of power outages during the Malampaya shutdown putting into question the validity of the proposed electricity rate increase.

"Republic Act No. 9136 or the Epira was enacted in 2001 to implement reforms in the energy sector, including assurance of the quality, reliability, security and affordability of the supply of electric power in the country. However, the proposed increase in the generation cost of Meralco runs counter to this purpose of the aforesaid law," Trillanes said.

On Monday, the Energy Regulatory Commission approved the implementation of the said hike amounting to more than P4 per kwh, the highest in the country’s history, which will be distributed in three tranches. The first and biggest tranche is an increase in the amount of P2.41 per kwh expected to be reflected in the December billing, the other tranches will be distributed in the early months of 2014.

The price hike was due to the increase in generation charges triggered by the scheduled maintenance shutdown of Malampaya natural gas platform, where Meralco takes bulk of its power requirements.

This was compounded by the outage of other plants where Malampaya sources its power from.

Senate President Franklin Drilon said he was in favor of amending PD 910.

"Ako po ay pabor na tingnan natin iyong batas para po magamit ang Malampaya Fund in order to serve as a buffer dito po sa mga gumagamit ng kuryente. Dahilan po ay ang Malampaya Fund ay talagang for energy purposes. We have to amend the law in order to allow the subsidy, in order to prevent this hike," Drilon said in a press conference.

The Senate President said he will favor any move to amend Epira considering the domino effect that this will create for the country.

"Malaki ang epekto ng pagtaas ng presyo ng kuryente sa pangunahing bilihin at makakaapekto sa ating ekonomiya na ngayon ay tinamaan pa ng Yolanda. So, ako po ay sang-ayon na baguhin ang batas, amyendahin natin at para magamit na subsidy dito po sa consumers," Drilon added.

Drilon, however, said the earliest the amendment can be done is in January.

At the hearing on Tuesday of the House Committee on Energy, Meralco officials admitted that the unplanned outages in several power plants prompted them to purchase its power supply from the wholesale electricity spot market – which is more costly.

For his part, Senate President Pro Tempore Ralph Recto supported the proposal of amending the said existing law. He explained that there is really a need to amend Presidential Decree 910 to allow the use of Malampaya fund to subsidize the cost of electricity.

Recto said PD 910 limits the use of the Malampaya fund to financing energy-related activities such as exploration, development, and exploitation of energy sources.

Senator Vicente Sotto III said there might be a need to review the Epira or even repeal it entirely as it appeared to be no longer effective.

Sotto said it is very obvious that the Epira is no longer serving the people and is doesn't fit for the present time anymore.

The opposition senator said a thorough review of the power of the Energy Regulatory Commission should be considered as well as the proposed probe by the Senate into Meralco’s imposition of what is considered biggest ever rate increase in the country. (Camille P. Balagtas/Sunnex)

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