Repeal EPIRA: PH power rates double in 15 years–IBON

June 9, 2016

by IBON Foundation

Research group IBON said that fifteen years of the Electric Power Industry Reform Act (EPIRA) has only strengthened corporations’ monopoly of the Philippine power industry, and burdened consumers with high power rates. The group, a member of the POWER alliance, said that EPIRA must be repealed.

EPIRA or Republic Act (RA) 9136 was enacted in 2001, leading to the massive privatization and deregulation of the country’s power sector. Despite government touting EPIRA as the answer to the country’s power and financial troubles, residential power rates have escalated by 99% from Php 4.87/kwh in 2000 to Php 9.68/kwh in 2015. According to reports, Philippine power rates are among the highest in Asia and fifth in the world.

EPIRA has only fortified private power monopolies, giving them the reins of the industry and allowing them to rake in super profits at the expense of consumers. IBON said that as of 2014, private corporations controlled 93.4% of the country’s gross power generation. Three groups – San Miguel Corporation, the Aboitiz group and the Lopez group – dominate the Luzon grid, accounting for nearly 60% of installed capacity.

The top ten power corporations had combined gross revenues worth Php524 billion also in 2014. The Manila Electric Corporation (Meralco) alone accounted for 50% or Php261 billion of this, said the group. In 2013, the Energy Regulatory Commission (ERC) meanwhile declared that there was ‘market abuse’ among the 13 power participants in the Wholesale Electricity Spot Market (WESM) that led to a spike in prices due to speculation.

The WESM was created by EPIRA to supposedly foster competition and ensure better pricing that would reduce power rates overtime. But under conditions of monopoly control and lack of government regulation, the WESM is useless and a few big corporations are able to articially manipulate and increase power prices.

Meralco was compelled to halt rate hikes after pressure coming from consumer advocates resulted in a Supreme Court Temporary Restraining Order, IBON said, but automatic adjustments such as that for generation cost upped rates nevertheless.The group called on the incoming administration to halt EPIRA and keep its promise of beginning to transform the energy sector into one that truly fuels households and national development and does not burden Filipino power consumers with excessive bills.