Escudero files bill amending Epira

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Friday, March 28, 2014


SENATOR Francis Escudero has filed a bill seeking to amend the Electric Power Industry Reform Act (Epira) to bolster government control over all existing and future assets of the National Power Corporation (Napocor) in order to temper the profit-oriented practices in the power sector.

Escudero, chairman of the Senate committee on finance, put forward Senate Bill 2167 to amend Section 47 of Republic Act 9136 or the Epira, and place all remaining assets of Napocor under government.

His proposal effectively repeals the provision which states that assets "shall be sold in an open and transparent manner through public bidding, and the same shall apply to the disposition of independent power producers (IPP) contracts."

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Escudero, who voted against Epira when he was still a member of the House of Representatives, said the law failed to deliver its promise to solve the country's perennial energy woes.

"The Epira became a misnomer to its purpose. Instead of reforming the business environment to better service and improve delivery of supply and lower rates to consumers as it was hoped then, it has caused the government to lose control of the power industry," Escudero said, as he noted that the Philippines has one of the highest power rates in Asia.

Such situation, he added, "enabled private businesses to raise power rates with impunity."

SB 2167 also seeks to exclude the Agus and Pulangi complexes in Mindanao from privatization since these hydropower plants supply half of the energy demands in Mindanao.

"We should endeavor to rehabilitate these two resources in order to stabilize the market situation in Mindanao as hydropower is still the cheapest. Monopoly in Mindanao will also be cut," Escudero said.

He said all existing and future power assets, especially from hydro resources, must be retained, rehabilitated, maintained and developed.

The bill provides that in case of transfer of possession, control, operation or privatization of multi-purpose hydropower facilities, the control and power of the government must always be empowered to direct water usage in all cases it may deem appropriate to satisfy all water requirements imbued with public interest.

Escudero's bill also presses for the development of geothermal resources in the country and construction of new geothermal plants and that steamfield assets and generating plants of each existing geothermal complex should not be privatized.

"Unless we institute policy reforms through amending the failures in Epira, it will be difficult to maintain control of the power industry by the government and make it service-oriented. We must put an intervening mechanism to temper the operation of free market forces especially in cases of monopolies and/or abuse to protect greater public interest," Escudero said.

For his part, Senator Sergio Osmena III expressed the belief that Epira is a good law and market failures under RA 9136, which recently happened is mainly a result of a lack of long-term planning and "awful management."

"Energy is a long term planning situation. We should be planning 10 years ahead. You cannot plan for 1 year or 2 years. It takes already 4 to 5 years to set up a plant. And if the leaders that we have in the Department of Energy and ERC don’t plan this way, then we will always get into this type of situation, na minsan maganda, minsan magkakaroon ng shortage," Osmena said.

Osmena added that there's been awful bad management at the Department of Energy since 2007.

"It's unfortunate because we have a very good law, many other countries in the world are trying to copy our law now," Osmena said.

The senator said that Epira has made the energy industry sustainable. (Camille P. Balagtas/Sunnex)

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