Executive Summary
The Department of Energy (DOE) continues to supervise the implementation of the Republic Act No. 9136 or the Electric Power Industry Reform Act of 2001 (EPIRA). Overseeing the power reform activities, the DOE submits the 32nd Status Report on EPIRA implementation as of April 2018 which includes accomplishments and various challenges that were pursued by the DOE in collaboration with the Energy Regulatory Commission (ERC) and the DOE’s Attached Agencies, namely, the National Electrification Administration (NEA), Power Sector Assets and Liabilities Management Corporation (PSALM), National Transmission Corporation (TransCo) and National Power Corporation (NPC), as well as other key private sector entities, among others, the National Grid Corporation of the Philippines (NGCP) and the Philippine Electricity Market Corporation. Correspondingly, the submission of this report to the Joint Congress Power Commission (JCPC) shall serve as concrete basis of the JCPC to formulate legislative recommendations to ensure that EPIRA objectives are being met.
On the privatization of the power sector assets of the government, PSALM continues to undertake activities for the eventual sale of all remaining assets thru the guidance of the PSALM Board and the DOE as to matters that may affect supply and demand for better services to electricity consumers. Relative thereto, PSALM issued a revised timeline for the completion by 2022 of the sale of its remaining assets. The bulk of the assets are targeted to be sold by 2019 which include the Malaya Thermal Power Plant, Casecnan and Kalayaan Hydro Power Plants, among others. Meanwhile, out of the proceeds from privatization, PSALM was able to reduce the country’s power sector foreign debts from the beginning balance in 2000 of PhP830.7 billion to PhP466.2 billion (or USD9.3 billion) as of 4th quarter of 2017 or a decrease of PhP774.5 billion.
For the Wholesale Electricity Spot Market (WESM) implementation, major highlights include the establishment of the Independent Market Operator wherein the DOE promulgated the Department Circular No. 2018-01-0002 entitled “Adopting Policies for the Effective and Efficient Transition to the Independent Market Operator (IMO) for the WESM”. Likewise, the DOE, in coordination with the Energy Regulatory Commission, the Market Operator, System Operator and other key stakeholders, remain steadfast in pursuing the implementation of the new WESM design and the WESM Mindanao.
Initiatives to ensure consumer protection were likewise spearheaded by the DOE, among others, the promulgation of Department Circular No. DC2018-02-0003 entitled “Adopting and Prescribing the Policy for the Competitive Selection Process (CSP) in the Procurement by the Distribuition Utilities of Power Supply Agreement for the Captive Market”, on 01 February 2018. The said policy is to ensure compliance to Section 23 of the EPIRA, of all distribution utilities as they are mandated to supply the captive customers in the least cost manner. the DOE issued The said policy will be applicable for both on-grid and off-grid DUs and is envisioned to provide mechanism for fair and transparent procuirement process that will promote competition and greater private sector participation to attain adequate capacity to meet the demand in the captive market. Likewise, the DOE started consultation process for the policy on uniform billing and review of the implementing rules and regulation of the EPIRA.
With regard to the implementation of the retail competition and open access (RCOA), the Supreme Court is still to decide on the cases filed by various groups in relation to the policies promulgated by the DOE and the corresponding rules and regulations issued by the ERC. To provide relief, DOE promulgated two (2) separate policies as action in response to the Supreme Court Order thru Department Circular No 2017-12-0013 entitled, “Providing Policies on the Implementation of Retail Competition and Open Access (RCOA) for Contestable Customers in the Philippine Electric Power Industry” and Department Circular No. 2017-12-0013 entitled, “Providing Policies On The Implementation Of Retail Competition And Open Access (RCOA) For Retail Electricity Suppliers (RES) In The Philippine Electric Power Industry”.
In terms of the electricity pricing as of March 2018 compared to the December 2017 rates, there is a significant increase in country’s average electricity rates, electric cooperatives’ average systems rate, and national average systems rates of private distribution utilities average systems by PhP1.25 centavos/kWh, PhP0.98 centavos/kWh, and PhP1.25 centavos/kWh, respectively. While for Meralco, an increase in its average electricity rates is in the amount of PhP1.07 centavos/kWh.
Meanwhile, the power supply-demand situation/outlook include reports on the significant incidents in the power system, outages, and various initiatives of the DOE being undertaken in compliance with Section 71 of the EPIRA. Total dependable capacity for the national grid was at 20,515 MW while maximum available capacity was recorded at 16,228 MW. Coal power plants continue to provide the bulk of power generation at 50% followed by natural gas at 22%. The country’s peak demand for this period recorded at 13,789 in 2017 compared at 13,272 MW in 2016.
The household electrification level of the country is estimated at 90.7%. In terms of the government’s continuing effort to intensify rural electrification, the current implementation of the Nationwide Intensification of Household Electrification (NIHE) Program with the renewed targets for household electrification is currently in process to meet the target for the year 2017.
The DOE, as administrator of fund derived from the implementation of Energy Regulations No. 1-94, as amended has already established a total of 1,021 Trust Accounts for Electrification Fund (EF) Development and Livelihood Fund (DLF), Reforestation, Watershed Management, Health and/or Environment Enhancement Fund (RWMHEEF). The financial benefit from inception (Year 1995) to April 2018 has accrued to PhP11.3 Billion from which PhP7 Billion was obligated for the implementation of projects. This leaves an available fund at around PhP4.3 Billion available for beneficiaries.
Click to view/download PDF file 32nd Status Report on EPIRA Implementation