Think tank pushes for Epira repeal, says it doubled power rates in 15 years

The research group IBON said 15 years of the Electric Power Industry Reform Act (Epira) only strengthened the monopoly of corporations on the Philippine power industry and burdened consumers with high power rates. The group, a member of the POWER alliance, said Epira must, therefore, be repealed.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 the government’s touting of Epira as the answer to the country’s power and financial troubles, residential power rates have escalated by 99 percent, from P4.87/kwh in 2000 to P9.68/kwh in 2015. According to reports, Philippines power rates are among the highest in Asia and the 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 percent of the country’s gross power generation. Three yearsgroups – San Miguel Corp., the Aboitiz group and the Lopez group—dominate the Luzon grid, accounting for nearly 60 percent of installed capacity.

The top ten power corporations had combined gross revenues worth P524 billion also in 2014. The Manila Electric Corporation (Meralco) alone accounted for 50 percent or P261 billion of this, said the group. In 2013, the Energy Regulatory Commission (ERC) 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 artificially manipulate and increase power prices, IBON said.

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 increased 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.

IBON Foundation Inc. is an independent development institution established in 1978 that provides research, education, publications, information work and advocacy support on socioeconomic issues.