The President\u2019s request (\u201cno, we demand\u201d) in his last State of the Nation Address (SONA) to remove the system loss charge from consumers\u2019 electric bills drew loud applause from Congress.<\/p>\n\n\n\n
But the lawmakers\u2019 reaction was overdone for a small and belated gesture. For 25 years under the Electric Power Industry Reform Act (EPIRA), consumers have been demanding action on the much bigger issue: ending the privatization and deregulation of the power sector.<\/strong><\/p>\n\n\n\n It has been 25 years of expensive electricity draining consumers\u2019 purses and bloating private companies\u2019 pockets. Yet, some two million Filipino households are still without stable access to electricity.<\/p>\n\n\n\n Broken currents, broken promises. EPIRA (Republic Act 9136) has failed to deliver cheap and uninterrupted power, universal access, and competition. Like other public services and utilities, the electric power industry has been transformed into a profitable venture where private gains take precedence over public welfare.<\/p>\n\n\n\n Expensive electricity<\/em><\/strong><\/p>\n\n\n\n EPIRA was enacted on June 8, 2001 to transform the power sector through privatization, competition, and market-based pricing. Yet beyond recurring blackouts, its most enduring legacy has been persistently high electricity prices.<\/p>\n\n\n\n Much of the government’s power generation assets were privatized, then electricity generation and supply were opened to private firms. The Wholesale Electricity Spot Market (WESM) was established to allow generators and other market participants to buy and sell through competitive bidding, with wholesale power rates set by the market rather than the government. Retail Competition and Open Access (RCOA) was introduced to allow eligible consumers to choose their electricity suppliers.<\/p>\n\n\n\n The price of electricity surged from Php4.87 per kilowatt-hour (kWh) in 2000 to Php14.48\/kWh in 2026, increasing the monthly bill of an average household consuming 200 kWh almost threefold from Php974 to Php2,896.<\/p>\n\n\n\n Household spending on electricity consequently ballooned by 524% from a total of Php59.7 billion before EPIRA to Php372.8 billion in 2023. This outpaced families\u2019 average total spending, which increased by just 346% in the same period. This also took up more of the already meager national average minimum wage, which is worth 21% less today than in 1989.<\/p>\n\n\n\n Electricity rates include too many charges, not all of which directly benefit consumers. Meralco, the main distribution utility in the national capital and nearby regions, attributes rising electricity prices to pass-through generation charges from more expensive imported coal and natural gas, peso depreciation that raises the cost of dollar-denominated contracts and imported inputs, and various charges passed on to households. Power-sector costs shouldered by consumers include the generation charge (55-68% of the bill), transmission charge (about 8%), taxes and mandated government charges (about 11%), flat per-kilowatt-hour universal charges, the systems loss charge (about 5%), and subsidies including missionary electrification charge, environmental charge, and lifeline and senior citizen subsidies.<\/p>\n\n\n\n WESM likewise fails to moderate prices because a supply-constrained market allowed expensive generators to influence prices across the system. Meanwhile, RCOA, which was designed for consumers using at least 500 kWh, primarily benefited large corporations while most households remained excluded.<\/p>\n\n\n\n Oligopolized industry<\/em><\/strong><\/p>\n\n\n\n Competition was not achieved. The market is held by only a few conglomerates with substantial control over power generation, distribution, and related energy assets. Instead of creating a genuinely competitive market, EPIRA facilitated the concentration of the electricity sector in the hands of a small number of large corporations whose profits depend on electricity remaining a commercial commodity rather than a public good.<\/p>\n\n\n\n Privatized power generation<\/strong> is dominated by a handful of major conglomerates. Among the largest players are the Aboitiz Group through Aboitiz Power, richest tycoon Enrique Razon and the Lopez Group through First Gen, Ramon Ang through San Miguel Global Power, the Ayala Group through Ayala Corporation Energy (ACEN), the Salim group and Manuel Pangilinan through Meralco PowerGen. Razon also owns Prime Infrastructure, which controls the Malampaya gas field and major natural gas assets.<\/p>\n\n\n\n Meanwhile, the country’s transmission<\/strong> grid is operated by the National Grid Corporation of the Philippines (NGCP), a private consortium that includes the State Grid Corporation of China, Monte Oro Grid of the Sy conglomerate, and Calaca High Power Corporation of the Robert Coyiuto Jr group.<\/p>\n\n\n\n Electricity reaches consumers primarily through distribution<\/strong> utilities led by Meralco, chaired by Manuel V. Pangilinan and serving roughly half of the country’s electricity demand, alongside Aboitiz-owned utilities such as Visayan Electric and Davao Light, and Enrique Razon’s MORE Power in Iloilo.<\/p>\n\n\n\n The sector is overseen by the Department of Energy (DOE), the Energy Regulatory Commission (ERC), and the Independent Electricity Market Operator of the Philippines (IEMOP) which operates the WESM. However, the dominance of a few conglomerates across the segments of the industry\u2014from generation to distribution\u2014raises fundamental questions about how much competition can actually emerge in a market where economic power is concentrated in the hands of a small number of corporate groups. Just five firms\u2014Aboitiz Power, San Miguel Global Power, First Gen, Ayala Corp, and Meralco\u2014account for 68% of national grid capacity, with the three biggest accounting for 55% as of June 2026.<\/p>\n\n\n\n Meanwhile, eight oligarchs (Pangilinan, Aboitiz, Ang, Lopez, Razon, Consunji, Ayala, and Gotianun) accounted for 95% of power generation and distribution net income in the top 1,000 corporations as of 2024, with the three biggest accounting for 66% of the total net income.<\/p>\n\n\n\n The ERC was created as a supposedly independent regulator responsible for overseeing the electricity sector, including the unbundling of electricity rates to promote transparency, fair competition, and accountability. But the ERC also says that a core part of its mandate is to ensure electric companies\u2019 return on investments (ROI).<\/p>\n\n\n\n Records show that the ROI of companies existing since EPIRA\u2019s enactment mostly grew until 2024, to wit: Meralco (1.1-7.7%), Davao Light & Power Co., Inc. (2.3-6.1%), and Cagayan Electric Power & Light Co., Inc. (4.5-4.6%). The ROI of Visayan Electric Co., Inc. and Meralco\u2019s Vantage Energy Solutions and Management, Inc., which operates nationwide, is 12.3% and 20.2%, respectively. They exceed the 12% cap imposed by the Supreme Court in 2002.*<\/p>\n\n\n\n The power industry is a natural monopoly\u2014competition should never be a measure of efficiency. Why in the first place should a natural monopoly like the power industry be handed over to private corporations instead of being publicly owned, controlled, and managed by the State? For the oligarchs to gain immense profits.<\/p>\n\n\n\n Foreign players cash in<\/em><\/strong><\/p>\n\n\n\n Foreign players act as joint-venture partners, grid technology co-owners, and major \u2018clean energy\u2019 developers. Moreover, now that the Marcos Jr administration has allowed 100% foreign ownership of renewable energy projects, international corporate energy giants have entered the scene, riding the green energy transition bandwagon and cashing in.<\/p>\n\n\n\n In generation, major international firms and investors from Denmark (Copenhagen Infrastructure Partners), Spain (Acciona S. A.), Japan (JERA Co., Inc), South Korea (Korea Electric Power Corporation), and Thailand (Electricity Generating Public Co. Ltd (EGCO Group \u2013 Thailand) participate in renewable energy, natural gas, coal, and other power projects, often through joint ventures with local conglomerates.<\/p>\n\n\n\n In transmission and distribution, foreign participation remains subject to ownership limits but continues through strategic partnerships and investment holdings. The State Grid Corporation of China holds a 40% stake and serves as the technical partner of NGCP.<\/p>\n\n\n\n Consumers carry debt burden to subsidize profits<\/em><\/strong><\/p>\n\n\n\n EPIRA sought to reduce the financial burden of the power sector on the government by privatizing National Power Corporation (Napocor) assets and using the proceeds to pay off Napocor\u2019s accumulated debts and liabilities. This has cumulatively yielded Php916.6 billion, the DOE said, effectively reducing Napocor\u2019s stranded debts and stranded costs to Php260.6 billion.<\/p>\n\n\n\n Stranded debts are Napocor\u2019s remaining obligations after proceeds from privatization and other collections have been applied. Stranded costs are Napocor\u2019s losses arising from its contracts with independent power producers. These obligations were transferred to the Power Sector Assets and Liabilities Management Corp. (PSALM).<\/p>\n\n\n\n It may be recalled that in the process towards privatization, Napocor took on substantial commercial risks, such as take-or-pay commitments, fuel cost pass-through, and government guarantees to protect the profits of the independent power producers.<\/p>\n\n\n\n