Monday, March 31, 2014

WESM price cap extended

Business World Online
Posted on March 31, 2014 12:02:28 AM

A TEMPORARY price cap for power traded at the Wholesale Electricity Spot Market (WESM) has been extended, with concerned agencies noting the need for public consultations.

The WESM tripartite committee -- composed of the Department of Energy, Energy Regulatory Commission (ERC) and Philippine Electricity Market Corp. (PEMC) -- last week issued a joint resolution extending the effectivity of the P32 per kilowatt-hour (kWh) interim offer cap set last December.

“The interim price cap ... is hereby extended for a period of sixty (60) days from 27 March 2014 to allow for the conduct of public consultation on the proposed offer price cap,” the resolution, dated March 26, states.

The original price ceiling of P62/kWh was cut to P32 on Dec. 27 to address WESM price spikes, blamed as one of the causes of a record-high Manila Electric Co. (Meralco) rate hike that has been shelved and is being reviewed by the Supreme Court.

The committee last December also directed PEMC to come up with a new price cap.

The panel’s March resolution noted that PEMC presented the results of a study last Jan. 27 and the committee, in a March 20 meeting, met to finalize the price. Officials, however, “determined that the existing timeline was insufficient for public consultation”.

The tripartite committee, formed on June 2, 2006, noted that its tasks involved the “coordination of efforts, monitoring of price volatilities and setting of market mitigation or preemptive measures to be implemented” in the WESM.

The extension of the price cap, PEMC President Melinda L. Ocampo yesterday said, does “not assure lower WESM prices this summer”.

“Prices in the WESM will continue to depend on the principle of demand and supply. Implementing the interim price cap was just a measure to address the high clearing prices.”

Higher WESM prices have been blamed for a P4.15/kWh rate hike that Meralco was supposed to start implementing last December. A P5.33/kWh increase was also sought for January but Meralco last week slashed this to P0.45/kWh after PEMC revised WESM prices for the December supply month. -- Claire-Ann Marie C. Feliciano source

Meralco files for lower rates

Business World Online
Posted on March 31, 2014 12:03:20 AM
By Claire-Ann C. Feliciano, Reporter

MANILA Electric Co. (Meralco) customers may see a reduction in the distribution charge component of their power bills starting July, with the firm seeking to cut the rate following an annual revenue requirement review.

Meralco, in a March 28 petition that was published yesterday, asked for the Energy Regulatory Commission’s (ERC) approval to implement a maximum average price (MAP) of P1.5562 per kilowatt-hour (kWh) for the 2015 regulatory year and distribution rates adjustments across all customer classes.

“The rates subject of the ... application are lower than Meralco’s MAP for RY 2014 of P1.6474/kWh,” the petition noted.

“Thus, to allow its customers to immediately enjoy the lower distribution rates, it is necessary that a provisional authority be immediately issued authorizing Meralco to implement the proposed rates, pending hearing on the merit of the ... application.”

The MAP is based on the annual revenue requirement of a distribution utility. It also takes into account performance-based incentives.

“Said MAP shall then be allocated by the distribution utility in setting the rate schedule for the distribution, supply and metering charges for each customer class or segment,” the petition explained.

The proposed MAP covers a P1.1398/kWh distribution charge, P0.2537/kWh supply charge and a P0.1627/kWh metering charge.

Larry S. Fernandez, Meralco’s head for utility economics, said the rates, if approved, would be implemented starting July of this year. He added that the different customer classes would see varying distribution rate reductions depending on their consumption.

With the proposed MAP, residential customers consuming 200 kWh and below will pay a distribution charge of P1.1282/kWh, while those using 201-300 kWh will pay P1.4855/kWh. Those consuming 301-400 kWh, meanwhile, will pay P1.8227/kWh and those at 401 kWh and above will be charged P2.4100/kWh.

Supply and metering charges for all residential customers will be uniform at P0.5730/kWh and P0.3840/kWh, respectively.

Meralco’s distribution rate -- which is adjusted every regulatory year -- accounts for 17.5% of a consumer’s bill. The generation charge, which is revised monthly, accounts for the bulk at 57%.

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by Philippine Long Distance Telephone Co. (PLDT). Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld. source

SMIC eyes consolidation of other operating units

By Neil Jerome C. Morales (The Philippine Star) | Updated March 31, 2014 - 12:00am

MANILA, Philippines - Mall and banking conglomerate SM Investments Corp. (SMIC) is looking at pursuing a consolidation program for its other operating units, particularly those involved in power and infrastructure.

Consolidating assets into a specific company or group will improve the operating units’ competitiveness while making them more attractive to investors, an executive said.

“The plan is this: we started with property and we want to consolidate also the banking. The other investments, that can also be consolidated,” said SMIC chief financial officer Jose Sio.

This will allow investors to quickly identify investment opportunities in SMIC companies, be it property, gaming, infrastructure or power, Sio said.

However, Sio said the consolidation will not necessarily result in the creation of a new unit.

In May, the conglomerate announced the merger of its real estate businesses, creating the most valuable property firm in Southeast Asia. It merged upscale Tagaytay Highlands developer Highlands Prime Inc., condominium builder SM Development Corp. and private firm SM Land Inc., with mall developer SM Prime Holdings Inc. as the surviving entity.

Sio said SMIC already showcased its consolidation-backed business model through umbrella property firm SM Prime.

Moving forward, the conglomerate is looking at combining its energy-related assets.

SMIC earlier said integrating all energy and mining businesses under a single entity like listed APC Group Inc. is an option but the matter is something the group has yet to look at.

The conglomerate is a significant minority shareholder in Philippines’ largest copper producer Atlas Consolidated Mining Corp. APC, which is undergoing a restructuring program, holds several contracts for geothermal projects.

The SM Group, through private firm All First Equity Holdings, is global oil giant Chevron’s partner for the latter’s geothermal power business in the Philippines. The Sy family, through its partnership with Chevron, is setting its sights on other geothermal development opportunities in Cebu, Bohol, Palawan, Samar, Northern Luzon primarily as Kalinga, as well as in Mindanao, to stake a bigger claim in the local renewable energy sector.

The conglomerate is spending P80 billion this year to support continuous growth of its operating units, up from P65 billion in 2013 and P56 billion in 2012.

Profits of SMIC climbed 11 percent to P27.45 billion in 2013 from P24.67 billion a year ago. Revenues jumped 13 percent to P253.5 billion from P223.9 billion in 2012. source

Ayala boosts wind farm

Manila Standard Today
By Alena Mae S. Flores | Mar. 31, 2014 at 12:01am

NorthWind Power Development Corp., a company controlled by Ayala Corp., will start the third phase of the Bangui Bay wind farm in Ilocos Norte province to add 18 megawatts to the existing 33-MW project.

Energy Department records showed the expansion project would raise the total capacity of Bangui wind farm to 51 MW, solidifying its status as the biggest wind farm in Southeast Asia.

NorthWind has already received clearance for the grid impact study while clearing work and site inspection started in January this year, records showed.

Energy Department assistant director Marissa Cerezo confirmed the expansion project, saying NorthWind expected to complete the project by the third quarter. “Construction is ongoing for the 18 MW,” Cerezo said.

The Bangui Bay wind farm sells electricity to the Ilocos Norte Electric Cooperative and provides 40 percent of the power requirements of Ilocos Norte. The expansion project is expected to cost $50 million.

NorthWind is also developing wind projects in Aparri, Cagayan and Pamplona, Cagayan Valley with combined capacity of up to 80 megawatts.

NorthWind’s subsidiaries are undertaking the new projects. Northpoint Wind Power Corp. will develop the 40-megawatt wind project along the shoreline of Barangay Dodan in Aparri, Cagayan.

Northpoint is expected to spend around $95 million for the Aparri wind project, which will consist of about 20 to 25 wind turbines.

Meanwhile, NorthEast Wind Systems Corp. will construct the 40-MW wind farm in Pamplona, Cagayan Valley, involving 16 turbines of 1.65-MW capacity. NorthEast will sell electricity to the Luzon Grid.

NorthWind president and chief executive Niels Jacobsen earlier said the company was waiting for the start of construction of the transmission line that would link the wind farms to the power grid.

“It’s all about the transmission line. [It takes] three years at least for the transmission. We will go ahead with the project when we actually see it [transmission],” Jacobsen said.

NorthWind chairman Ferdinand Dumlao also said with the partnership with the Ayala Group, “we are confident that we can embark on these new projects.” source

PSALM to auction off two power plants today

Business World Online
Posted on March 31, 2014 12:01:34 AM
By Claire-Ann M. C. Feliciano, Reporter

TWO STATE-OWNED power facilities are to be auctioned off by the Power Sector Assets and Liabilities Management Corp. (PSALM) today, a top official said over the weekend.
Emmanuel R. Ledesma, PSALM president and chief executive officer, said the company is set to privatize the 153.1-megawatt (MW) Naga power plant complex and sell the disposable assets of the decommissioned 850-MW Sucat thermal plant.

“The Naga plant and Sucat assets will be bid out on Mar. 31. It will be done simultaneously,” Mr. Ledesma said in a text message.

The official said four local companies are expected to participate in the third round of bidding for the Naga complex located in Cebu.

Last month, Mr. Ledesma identified the prospective bidders who attended the pre-bid conference as AC Energy Holdings, Inc.; SPC Power Corp.; Therma Power Visayas, Inc.; and Trans-Asia Oil and Energy Development Corp.

The first two auctions for the privatization of the Naga complex -- held in July and September last year -- both failed after only one bidder participated in both exercises.

The power facility is currently being handled by SPC under an operation and maintenance service contract.

The power plant complex consists of three power plants: the coal-fired Cebu thermal power plants 1 and 2, with installed capacities of 52.5 MW and 56.8 MW, respectively; and 43.8-MW Cebu diesel power plant, consisting of six 7.3-MW diesel-fed power units.

Meanwhile, the sale of the disposable assets of the Sucat plant was moved from an original schedule of March 12.

“Due to schedule constraints, the bidding for the Sucat plant assets was moved. We had to consider the availability of the members of the board in conducting a bidding,” Mr. Ledesma explained.

PSALM hopes that all the firms that participated in the pre-bid conference will show up at the auction, according to the official.

The company last January identified the six local and three foreign prospective bidders for the non-power generating assets of the Sucat plant.

The six Filipino companies were: Aluminum Recycling Specialist, Inc.; Bonapor Metal Contractor Services & General Merchandise; Genetron International Marketing; MZQ Trading; Sta. Clara International Corp.; and VPD Trading.

The foreign ones were: DDM Demontage BV from the Netherlands; Gagasan Steel, Inc. from Malaysia; and Sinolink International Enterprise Holdings Ltd. from China.

“While PSALM is selling the Sucat plant as a decommissioned power facility, we give equal importance to this bidding exercise, as PSALM judiciously strives to improve the government’s financial position through its privatization,” Mr. Ledesma said.

PSALM is selling all plant equipment, structures, auxiliaries and accessories of the Sucat plant located in Muntinlupa City.

The oil-fired plant was acquired by the National Power Corp. (Napocor) in November 1978. It is composed of one 150-MW unit, two 200-MW units, and a 300-MW unit.

The Sucat plant officially commenced commercial operations on Aug. 1, 1968 after the completion of unit 1. Units 2 to 4 went online after their construction over the three years ending 1972.

However, these facilities were decommissioned in January 2000 (units 1 and 4) and January 2002 (units 2 and 3) due to high operating costs.

Under the Republic Act No. 9136 or the Electric Power Industry Reform Act of 2001, PSALM is mandated to manage the privatization and maintenance of Napocor’s power generation assets, liabilities, contracted capacities, and disposable assets. source

Tight power supply seen: Existing capacity enough but reserves thin – DOE

By Iris C. Gonzales (The Philippine Star) | Updated March 31, 2014 - 12:00am

MANILA, Philippines - The Philippines continues to brace for tight power supply this summer, with reserves estimated at 200 to 300 megawatts, the Department of Energy said.

“Based on our computation, there are reserves but it’s thin. At times, at the peak, there would be only 200 to 300 MW,” Energy Secretary Carlos Jericho Petilla said before leaving for Germany over the weekend to attend a study tour on renewable energy.

A tight supply means that based on the computation, there is enough existing capacity to cover the projected demand but that reserves are thin to cover unforeseen events such as if a power plant goes on unplanned shutdown.

“If we have a repeat of the situation in November and December when a plant went on unplanned shutdown, we will have a problem but if the plants don’t go down, we have more than enough for this summer. We cannot afford major plants to go down. That’s our problem,” Petilla said.

According to data from the National Grid Corp. of the Philippines (NGCP), the country’s transmission highway operator, the highest peak demand will come in the month of May at 8,654 MW in Luzon with available capacity at 9,689 MW.

In the Visayas region, highest demand is estimated at 1,554 MW against an available capacity of 1,679 MW while Mindanao will have a peak demand of 1,400 MW against available capacity of 1,432 MW.

Petilla has also tapped big power users for the so-called Interruptible Load Program or ILP.

“As early as December we already gathered industry players who are willing to participate. There have been series of meetings with the industry players. There’s a total of roughly around 2,000 MW of generating capacity from back-up generators in the franchise area of Manila Electric Co. (Meralco). For the purpose of doing a pilot, we focused on 500MW, and our focus is industry players and also malls,” he said.

“What’s in it for them? Not only are they going to help with the generation if they are called and if they are needed but at that particular time they also get paid,” Petilla added.

He said Meralco would pay them for the generation cost to be recovered from consumers.

Inevitably, it would be expensive but there would be no blackouts, Petilla said.

Under the program, entities with at least one MW power source can use their own generators instead of sourcing their power from the grid. source

Sunday, March 30, 2014

Conserve energy this summer, Malacañang urges public

The Manila Times
March 30, 2014 10:33 pm

AS summer has officially set in, Malacañang on Sunday urged the public to help prevent an energy crisis by saving on electricity, the demand for which is usually at its peak during the hot season.
The Palace call came as a lawmaker warned that the country needs more sources energy.
“Our voluntary conservation measures will help in ensuring steady supply of electricity,” Presidential Communications Secretary Herminio Coloma Jr. said.
The Palace official made the remark amid incessant fears of a possible electricity crisis during the summer season because of the expected high demand and low supply. Some power plants in Luzon will be off the grid for their scheduled maintenance.
In the coming weeks, the government is expected to make the Malaya plant in Rizal province operational to cover for the low output due to these plants’ maintenance shutdown.
“We are collating all necessary facilities and resources that we can use to cope with the expected surge in demand. All can work together to reduce the risks by voluntarily cutting down on usage, especially when it is not needed,” Coloma stressed.
Officials of the Manila Electric Co. (Meralco) had warned that supply will be tight this summer unless the Malampaya plant is operated. However, power rates are likely to rise because the plant uses diesel, a more expensive fuel.
At least two power generating plants in Luzon are scheduled to go on maintenance shutdown this season.
Coloma said the Department of Energy is on top of the situation and has been making the necessary preparations to ensure steady supply of electricity.
“The DOE is also coordinating with all stakeholders like owners of power plants, distributors, the National Grid Corporation, Meralco, and other distribution utilities because we are all in the same boat. We all must help in addressing this concern and ensure sufficient supply of energy to avoid any unjust burden,” he stressed.
New sources
But unless the government can put up new sources of power, the country will continue to face electricity shortages this year and in 2015.
“We not only need new power plants but also reconditioning and proper maintenance of existing power plants,” Rep. Isidro Ungab of Davao said.
Ungab, the vice chairman of the House appropriations committee, said there are power plants already being constructed and which may be in operation next year.
“Hence there is a shortage between now and by the time the new power plants are operational,” he said.
“With a projected economic growth of six percent to seven percent, more power sources is a must not only for Mindanao but the entire country as well,” Ungab said.
Rep. Carlos Zarate of Bayan Muna party-list said with Mindanao’s “massive potential” for renewable energy, it would be cheaper to develop these than “environmentally hazardous” coal power plants.
Rep. Neri Colmenares said the government should have used the P137-billion Malampaya funds to build more power plants to avert a shortage. source

Prepaid power option looms

Business World Online
Posted on March 30, 2014 08:49:07 PM

DISTRIBUTION UTILITY Manila Electric Co. (Meralco) hopes to complete the commercial test of its prepaid electricity service by the middle of this year, a senior company official said in a text message on Friday last week.

MANILA Electric Co. targets to complete tests by the middle of the year. -- AFP

“We had already started the commercial test for the prepaid service in Taytay and Angono last January,” Alfredo S. Panlilio, Meralco senior vice-president for commercial retail services, said, referring to two municipalities in Rizal province.

“We are targeting 2,000 commercial pilot customers by midyear. So far, we already have more than 200 prepaid meters running under this pilot phase.”

The pilot phase for Meralco’s prepaid electricity service, covering 200 households in Angono, was completed last year.

Mr. Panlilio said for the commercial test, Meralco wants to do a “live test” of the service by getting feedback on customers’ experience.

“We will ask for their preference. We want to understand their issues and address them before we officially launch the service,” he said. “We have already activated Kuryente Load top-up centers in the areas covered.

These are located in Meralco’s business centers, Bayad Centers, some sari-sari stores, and Generika pharmacies,” Mr. Panlilio added.

By the end of the commercial test, the official said Meralco expects to have “a good sense of how the whole system works for customers in preparation for the commercial launch.”

“For the commercial pilot, we will have a consumer survey. After that, we will file business rules with the ERC (Energy Regulatory Commission) before we push for the rollout to 40,000 customers,” Mr. Panlilio said.

“We are looking at a formal launch by the fourth quarter. For the rollout, we are initially looking at customers in Taytay and Cainta [in Rizal], Pasig City, Manila, Mandaluyong City and Makati City.”

The prepaid electricity service was initially targeted to be rolled out last year.

“What’s more important is we want to make sure that when we officially launch, we are confident that we have already addressed all issues and problems,” Mr. Panlilio said.

Meralco, in January last year, allotted $7 million for technical and commercial tests of its prepaid electricity service which will use an advanced metering system. Under the new system, customers will be able to pay in advance for electricity, with the amount automatically credited to their “smart” meters.

Meralco had tapped General Electric to be system integrator of its prepaid electricity service, Germany-based Orga Systems for the billing aspect and US-based Ecologic Analytics for meter data management.

Meralco distributes electricity in Metro Manila, Bulacan, Cavite and Rizal, as well as parts of Batangas, Laguna, Quezon and Pampanga.

Its net income edged up just 0.50% to P17.211 billion last year from P17.117 billion in 2012. Revenues climbed 4.7% to P298.636 billion from P285.270 billion, while costs and expenses grew 3.1% to P274.486 billion from P266.162 billion.

Shares of the company gained P4.20 or 1.53% to P278 apiece on Friday last week from P273.80 each on Thursday.

Beacon Electric Asset Holdings, Inc., which has the biggest stake in Meralco, is partly owned by the Philippine Long Distance Telephone Co. (PLDT). Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld. -- Claire-Ann Marie C. Feliciano source

National Grid cleared for P2-B Cagayan line

Business World Online
Posted on March 30, 2014 08:45:07 PM

THE NATIONAL GRID Corporation of the Philippines (NGCP) has received the green light to develop a P2.4-billion transmission line project in Cagayan province.
The Energy Regulatory Commission (ERC), in a decision dated Dec. 16, approved the grid operator’s Tuguegarao-Lal-lo (Magapit) 230-kilovolt (kV) transmission line project.

The project will involve construction of a new Lal-lo (Magapit) 230-kV substation; development of a transmission line that will link the new substation to the Tuguegarao substation; as well as expansion and configuration of the existing substation.

“The capital investment of the proposed project and activities is… P2,393,386,046.25 which will be funded through internal cash generated fund,” the decision read.

It added that the transmission line project is part of the development of the North Luzon loop that will connect the northwestern and northeastern 230-kV backbone of the Luzon grid. “This loop will provide adequate transmission facilities to cater to [sic] the huge wind power generation potential in the region, and importantly, to improve overall reliability of the transmission network of northern Luzon,” the decision read.

It also noted that existing transmission facilities have “reliability issues which endanger continuous and quality supply of power in the northern part of Luzon.”

Hence, the project is seen to “avoid power supply problems during line outage, repair, and rehabilitation and too ensure power quality to electricity consumers…”

“Perusal of the evidence presented… showed that the approval of NGCP’s Tuguegarao-Lal-lo (Magapit) 230-kV transmission project… will redound to the benefit of consumers in terms of continuous, reliable and efficient power supply,” ERC said.

ERC also ordered NGCP to submit a progress report on implementation of and schedule for the project. It also directed the firm to conduct competitive bidding for acquisition of key materials needed to develop the project.

NGCP -- a consortium composed of State Grid Corporation of China (40%), One Taipan Holdings Corp. (30%) and Calaca High Power Corp. (30%) -- took over operations of the country’s transmission network in 2009 under a 25-year concession agreement. The firm bagged the right to operate state-owned National Transmission Corp. assets after it submitted a bid of $3.95 billion in an auction conducted by the Power Sector Assets and Liabilities Management Corp. in 2008. -- Claire-Ann Marie C. Feliciano source

Monday, March 24, 2014

Solution to Phl energy woes? More power plants – DOE

By Iris Gonzales (The Philippine Star) | Updated March 24, 2014 - 12:00am

Read part 1 here

MANILA, Philippines - How do we move forward?

The Department of Energy (DOE) has issued several circulars to help avoid a repeat of the confusion and outrage sparked by the aborted rate hike early this year.

Energy Secretary Carlos Jericho Petilla said it is better to come up with solutions to the problem than wallow in a blame game.

A Jan. 23 hearing at the Senate on the power rate hike dispute, for instance, erupted into a frenzy of accusations and counter accusations among representatives of power companies and energy officials.

The controversy stemmed from the record high increase in the generation charge of the Manila Electric Co. (Meralco) to P9.10 per kilowatt-hour in December 2013 and P10.23 per kwh in January 2014.

The Supreme Court has issued a temporary restraining order (TRO) on Meralco’s December 2013 generation charge as it deliberates on a petition from militant and consumer groups for the permanent junking of the distributor’s rate hike bid.

In the Jan. 23 Senate hearing, power generators and Meralco said the government was at fault for not running the 650-megawatt Malaya Thermal Power Plant in Rizal. But the government said the rates would not have skyrocketed had the power generators not withheld their capacities.

The government also faulted Meralco for submitting bid of as much as P62 per kwh at the Wholesale Electricity Spot Market (WESM), the country’s trading floor for electricity.

In one of its circulars, the DOE amended the rules governing the WESM to allow power plants with “fast start capability” to run only when needed.

The circular has relaxed provisions of the WESM manual on registration, suspension, de-registration criteria and procedures on generation units so that power plants with fast start capability would no longer be required to run based on their registered minimum load but would be allowed to continue to submit offers in the market.

And because they have fast start capability, they can easily supply power on demand.

The circular is meant to enhance the operational efficiencies of oil-fired power plants by not requiring them to run continuously for 24 hours, according to the DOE.

Petilla said that with this circular, the capacity gap in the WESM would be reduced and would allow power generators to avoid penalties when they run on minimum power supply – provided they can readily supply power if the need arises.

“In the interest of ensuring adequacy and reliability of the power supply, the DOE shall continue to assess the performance of the generation units and if warranted, will use the necessary policies and effect changes to the WESM Rules, motu propio, as necessary,” Petilla said in Circular 2014-02-0004.

Under the new circular, generating units with fast start capability and duly certified by the System Operator or the National Grid Corp. of the Philippines (NGCP) would no longer be required to run based on their minimum stable load.

The DOE, through the circular, also directed the NGCP to determine and submit a certified list of all the generation facilities with fast start capability.

In another circular, the DOE also designated the Malaya plant as a Must-Run Unit (MRU) in the WESM.

Under WESM rules, an MRU is a generating unit identified and instructed by NGCP to provide the needed power supply on a real-time basis or on a particular schedule deemed necessary to ensure the reliability and security of power supply in the grid, especially during times of supply shortfall, the DOE said.

Based on the circular, Malaya will also be exempt from the Must-Offer Rule (MOR) of the WESM. The MOR requires all generation companies registered in the WESM to declare and offer their respective maximum generating capacities in the spot market to prevent capacity withholding by the power plants, the DOE also said.

The DOE, in a third circular, moved to allow market intervention in the WESM.

In DOE’s Circular 2014-01-0001, WESM operator Philippine Electricity Market Corp. (PEMC) has the option to intervene in the market by setting an administered price, based on the average price in the market in the last 30 days prior to the day of intervention.

It said that PEMC may intervene when there is a supply emergency or “where electricity supply capacity shortfall is measured at four percent or below the total demand.”

The PEMC, the DOE and the ERC, as a tripartite committee, also issued a joint resolution last Dec. 27 lowering the WESM market offer price cap to P32 per kwh from P62 per kwh.

The price cap is the maximum bid that participants in the WESM can offer to purchase electricity. Created in 2006, the tripartite committee’s task is to monitor price volatilities and set price mitigation measures.

The generators, not surprisingly, do not want the lower market cap and are still waiting for a more permanent market cap.

Through the Philippine Independent Power Producers Association or PIPPA, the generators also said there is no need to amend the Electric Power Industry Reform Act (EPIRA).

Instead, PIPPA said the government should just implement changes in market rules.

For one, the group said the market must allow power plants that do not want to offer any capacity to be called on as a last resort without setting the market price. Whether or not these measures will work remains to be seen.

In the meantime, electricity consumers continue to keep a close watch on their monthly electricity bills hoping for a reprieve from dreaded prices spikes. source

Emerging Power gets SEC nod to hike capital

By Iris C. Gonzales (The Philippine Star) | Updated March 24, 2014 - 12:00am

MANILA, Philippines - Filipino-owned emerging Power Inc. (EPI) obtained the green light from the Securities and Exchange Commission (SEC), to raise its authorized capital stock to P500 million.

The SEC approval came even as the company’s $180-million Montelago geothermal power plant project in Naujan, Oriental Mindoro has approached the drilling stage, said EPI chief executive officer Dennis Zamora.

He said the company has reaffirmed its commitment to complete the geothermal project in Barangay Montelago, Montemayor and Melgar B in Naujan.

“We affirm our commitment to the people of Mindoro and the rest of the country by seeing to it that we will establish and operate the Montelago geothermal power plant, and will deliver on our resolve to offer green energy at a lower rate,” Zamora said.

According to its plan, EPI’s plant will provide 40 megawatts of power to the province.

The company is eyeing to drill by the third quarter of this year and will start providing electricity by mid-2016.

EPI has also already signed Power Supply Agreements (PSAs) with Oriental Mindoro Electric Cooperative (ORMECO) and Occidental Mindoro Electric Cooperative (OMECO), a move that is seen to help address the power outages in the island.

Authorities have welcomed EPI’s investment in the province. Energy Secretary Carlos Jericho Petilla and Mindoro Rep. (2nd district, Oriental Mindoro) Rey Umali both said the project would help boost the province’s development.

“EPI’s move to energize the entire island with geothermal energy will help make Mindoro the green capital of the Philippines,” Umali said.

He said the province is aiming to become the renewable energy hub of the Philippines.

The project is expected to bring down the cost of electricity in Mindoro by 40 percent to only P6.58 per kilowatt-hour from P11 per kwh.

“What’s more, we will no longer need subsidy from the main grid. This means consumers from other parts of the country do not need to pay for that subsidy. This will also reduce their electric bill,” Umali said, referring to the subsidy paid by electricity consumers nationwide for power provided to off-grid areas.

EPI spokesman Gani Capaning said the 40 percent reduction is expected to translate to P2.1 billion in electricity bill savings for the Mindoro residents.

Antonie de Wilde, EPI chief technical adviser said that with the project, “the people of Mindoro and the Philippines could be assured of a sustained supply of clean and affordable power opposed to power derived from such fossil fuels as coal and petroleum.” source

Sunday, March 23, 2014

Meralco says pilot prepaid meter project to be fully rolled out by Q4

Business Mirror
23 Mar 2014 Written by Lenie Lectura

POWER retailer Manila Electric Co. (Meralco) said the commercial pilot of the remaining prepaid meters approved for rollout by the Energy Regulatory Commission (ERC) would take place in the fourth quarter of this year.

“The commercial launch is scheduled fourth quarter of 2014 up to 2015 for the balance of 38,000 meters,” said Alfredo Panlilio, Meralco senior vice president and head of customer retail services.

The ERC earlier approved a 40,000-unit prepaid meter project in January. The utility firm started the commercial pilot for 2,000 customers in Taytay and Angono, both in the provice of Rizal.

“We have gotten positive feedback. To date, after eight weeks into commercial pilot we have 1,050 applications and we are slowly going into those applications to energize them,” said Panlilio, adding that these applications are mostly new Meralco customers.

The utility firm has activated top-up centers in which customers can buy electricity load. Reloading can be done in Bayad Centers, Meralco business centers, sari-sari stores and Generika pharmacies. Eventually, Meralco would allow reloading in Smart centers nationwide.

“Our target is to have 2,000 prepaid meters [installed] by end-May. We now have 1,050 applications. Of this number, 140 now are already in service. Once we hit 200, we will conduct consumer research in terms of their experience of the service,” said Panlilio, adding that Meralco intends to shorten the processing time of these applications that currently takes three to four weeks.

He said the consumer research will form part of Meralco’s business model that will be submitted to the ERC.

The pilot activities, he added, will determine the viability of the planned platforms, the prepaid meters and the possible trouble-shooting mechanisms.

Meralco said the prepaid service offering will enable customers to budget their electricity consumption. The system also informs consumers if they need to reload immediately to avoid disconnection.

Prepaid electricity is also being used in other countries such as Indonesia, Australia and New Zealand, Meralco said.

The power retailer has allotted a budget of $7 million for the entire system. source

Lenie Lectura

ERC amends installed generating capacity limits on power firms

Business Mirror
23 Mar 2014 Written by Lenie Lectura

THE Energy Regulatory Commission (ERC) has adjusted the installed generating capacity limitation on the country’s power firms.

In a statement the commission said it approved on March 10 the adjustments for the installed generating capacity (IGC) per grid and the national grid, as well as the the market share limitation (MSL) per regional grids and the national grid for 2014.

Under Section 45 (a) of Republic Act 9136, or the Electric Power Industry Reform Act of 2001 (Epira), the MSL is set annually to prevent a person, company, related group or independent power producer administrator (IPPA), singly or in combination, to own, operate or control more than 30 percent of the IGC of a grid, and/or 25 percent of the national IGC.

Power firms cannot own facilities with installed capacities exceeding 3,612.42 megawatts (MW) in Luzon, from 3,558 MW; 548.187MW in the Visayas, from 613.692MW; and about 589.09MW in Mindanao, from 589.091MW. Based on ERC’s computation the IGC limit as of March this year was set at 3,958.087 MW at the national level from 3,929.343MW in March last year. As of end-March this year, the installed generating capacity stood at 15,832.35MW, a 35-percent increase from 15,717.37MW in the same period last year.

On a per grid computation, the Luzon grid registered an IGC of 12,041.417MW this year, up by 1.53 percent from the 11,859.988MW of the previous year.

A 10.67-percent drop was registered in the Visayas grid from 2,045.64 MW to 1,827.29 MW.

The Mindanao grid’s installed capacity, meanwhile, increased by 8.38 percent to 1,963.64MW from 1,811.74MW.

These adjustments are pursuant to the ERC Resolution 26, Series of 2005, also known as the guidelines for the determination of installed generation capacity in a grid and the national IGC and enforcement of the limits of concentration of ownership, operation or control of IGC. The guidelines were approved by the ERC on December 25, 2005, and became effective on February 22, 2006.

Section 3, Article II states in the said guidelines that the IGC per grid and national grid, and the MSL shall be adjusted by the cmmission on or before March 15 of the succeeding year and/or as often as necessary based on the maximum capacity of the power plants submitted by the generating companies and other entities required to submit the said reports.

The increases and decreases in the IGC per grid and national grid are based on the submission of the generation companies and are accounted for by the increase in the IGCs of some power plants; decrease in the IGCs of certain power plants; inclusion of IGCs for new, re-commissioned, or additional power plant facilities of independent power producers (IPPs); and exclusion of IGCs for IPPs that have undergone plant shutdown/rehabilitation or have stopped operations due to natural calamities.

“The ERC sets the installed generating capacity and the market share limitation yearly to promote free and fair competition in the generation and supply of electricity, to ensure consumer protection, and to enhance the competitive operation within the industry,” ERC Chairman Zenaida G. Cruz-Ducut said. source

World Water Day Global energy thirst threatens to worsen water scarcity–UN

Business Mirror
23 Mar 2014 Written by AP

ENERGY production will increasingly strain water resources in the coming decades even as more than 1 billion of the planet’s 7 billion people already lack access to both, according to a United Nations report.

“There is an increasing potential for serious conflict between power generation, other water users and environmental considerations,” said the UN World Water Development Report published on Friday that focused on water and energy. Ninety percent of power generation is “water-intensive,” it said.

Shale gas and oil production as well as biofuels “can pose significant risks” to water resources, pitting energy producers against farmers, factories and providers of drinking and sanitation services, the agency said ahead of Saturday’s annual World Water Day.

Water-related needs for energy production have tripled since 1995, according to GE Water, while more than half of the global cotton production is grown in areas with high water risks. Electricity demand is forecast to rise at least two-thirds by 2035, driven by population growth.

Infrastructure upgrades, smart meters and clean technologies would help conserve resources as “billions of gallons of water are leaked each day, and energy is required to clean and transport that water,” said Sensus, a US developer of water-metering systems. “When water is wasted, so is energy.”

The energy industry “needs to understand that if they don’t take water into account, they will have problems,” Michel Jarraud, who heads the UN-Water agency, said from Paris. “Water supply is already a constraint for energy projects in some countries, especially in Asia.”

Energy-water demands

THE warning comes as World Water Day events started on Friday in Tokyo and elsewhere. The US shale-energy boom has sparked concerns that hydraulic fracturing, which uses high volumes of water to extract gas and oil from shale, may hurt local waters’ quality and strain supplies.

Water “is critical for energy. About 80 percent of the water used in industry goes to thermal power plants. That means the rest of industry consumes practically nothing,” said N.K. Ranganath, managing director of the India business of Grundfos AS, a Danish maker of water-pumping equipment. “As long as you’re producing thermal power, you require water. There’s no technology that replaces water in thermal power.”

Globally, as water demand increases, more than 40 percent of the population is expected to be living in areas of “severe water stress” by about 2050.

The International Energy Agency (IEA), a Paris-based adviser to oil-consuming nations, estimates energy production will require one-fifth of global water withdrawals by 2035 compared with 15 percent in 2010. Over the period, it forecasts water consumption, a measure of the volume taken and not returned to its source, will rise a “dramatic” 85 percent.

US drought

IN the US “water scarcity threatens to constrain burgeoning domestic oil and gas production from shale formations,” according to the IEA.

Texas’s drought has “heightened concerns about water availability,” it said.

The latest US Drought Monitor shows moderate to exceptional drought conditions in 37.5 percent of the contiguous states, almost all west of the Mississippi River.

In developing countries, water constraints regularly lead to power shortages such as when monsoon rains were delayed in India two years ago, creating more power demand and blackouts. A drought in China in 2011 limited hydropower generation along the Yangtze River, causing electricity shortages.

‘Energy shortages’

“DROUGHTS make energy shortages worse, while lack of electricity reduces farmers’ ability to irrigate fields,” the UN report said. Water-pricing policies also play a role because they “rarely reflect the real cost” so energy producers aren’t encouraged to save.

About a fifth of the world’s aquifers are already over-exploited and water demand is expected to grow 55 percent by 2050 due to expanding populations and demand from factories, power plants and farming, the report said. At the same time, 2 billion people don’t have access to safe water and at least 1.3 billion lack electricity, most in Africa and Asia.

“Energy is perceived as big business that gets the attention of industry and politicians and attracts more investment than water,” Jarraud said. Yet, “to satisfy energy demand, we are adopting methods that require more water” such as shale projects and cultivating crops for biofuels. Bloomberg News source

Power demand surge worries Palace

The Manila Times
March 23, 2014 10:48 pm

MALACAÑANG is worried that available power supply may not meet the expected surge in demand during the summer months especially if some power plants will shut down for maintenance at the same time.
Presidential spokesman Edwin Lacierda on Sunday said while the Department of Energy (DOE) has assured stable supply during the hot months, outages may occur.
“During the summer season, expectedly the demand will soar because of the heat. The DOE said we still have sufficient supply, unless there will be many scheduled breakdowns [shutdown] of power plants, we will be fine,” the Palace official said.
Last week, officials of the Manila Electric Company (Meralco) warned of possible rate hikes and brownouts this summer. It said several power plants will go offline for maintenance, such as the 1,200-megawatt (MW) Ilijan plant of Kepco Philippines Corp. and the San Lorenzo power plant of First Gas Power Corp., which has a capacity of 500 MW.
To prevent a power shortage, the government plans to run the diesel-fired Malaya plant in Rizal to provide additional supply. However, buying electricity from expensive sources such as the Malay plant may force Meralco to increase its billing.
Lacierda said government officials continue to monitor the movement of power prices. He said while there may be rates increases, downward adjustments in power rates ordered by the Energy Regulatory Commission would balance the scenario.
Last week, Meralco Chairman Manuel Pangilinan warned of a tight supply in Luzon that may trigger price spikes in the electricity spot market.
“There is a perceived, if not acceptable, narrowing gap between reliable capacity and growing market demand, aging generating plants and increasingly severe climate changes,” Pangilinan said. source

BSP watching power prices

Business World Online
Posted on March 23, 2014 10:34:48 PM

A REDUCTION in pending power rate hikes, along with their timing, could result in slower inflation this year, a senior Bangko Sentral ng Pilipinas (BSP) official said.

“Both the size and the timing are important. If the size is smaller than what we assumed, then that could result in lower risks [to inflation] even as upside risks would remain,” central bank Deputy Governor Diwa C. Guinigundo said in an e-mail to reporters when asked how cuts to rate hikes sought by Manila Electric Co. (Meralco) would affect the BSP’s inflation forecasts.

“[A]ny delay in the implementation of the power adjustment, while inevitable, could result in lower inflation at least for 2014,” Mr. Guinigundo added.

Some impact, he noted, might be felt toward the latter part of this year but would be “bigger” next year.

Last Feb. 6, in trimming this year’s inflation forecast to 4.3% from 4.5%, the BSP’s policy-setting Monetary Board cited the Supreme Court’s shelving of a P4.15 per kilowatt-hour (kWh) rate hike that Meralco was to implement in tranches starting December.

During the policy meeting, monetary authorities also raised the 2015 inflation forecast to 3.3% from 3.2%.

Both revised estimates fall within the central bank’s target ranges of 3-5% and 2-4% for this year and the next, respectively.

Meralco officials last week said the deferred electricity rate hikes, including a petition to recover costs for January, would be much lower than originally set.

Hanging over consumers’ heads was a combined P9.48/kWh increase -- the P4.15/kWh being reviewed by the high court and a P5.33/kWh January adjustment pending with the Energy Regulatory Commission (ERC).

Meralco said it would now ask the ERC to approve just a P0.65/kWh increase for January based on a recalculated generation charge. It did not set a revised rate for the December rate, citing the ongoing high court review.

The distributor said the revisions followed adjusted Philippine Electricity Market Corp. (PEMC) billings for power sourced from the Wholesale Electricity Spot Market (WESM), along with “the recomputed costs for replacement power for Sual and Masinloc.”

WESM operator PEMC had adopted new prices in compliance with an ERC order after the regulator voided prices for the November and December supply months, citing market failure.

Higher prices charged by suppliers, particularly for power sourced from WESM, have been blamed for record adjustments that are being questioned by consumers.

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by Philippine Long Distance Telephone Co. (PLDT).

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld. -- Bettina Faye V. Roc source

Asia’s development tied to water, energy policies

Business World Online
Posted on March 23, 2014 10:31:51 PM

ASIA Pacific countries must improve national water and energy policies for sustainable development, the head of the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) said on Friday.

“Strongly interlinked and interdependent, the nexus between water and energy is critical for sustainable development in the Asia-Pacific region,” UN Under-Secretary-General and UNESCAP Executive Secretary Dr. Shamshad Akhtar said at a World Water Day celebration in Bangkok, according to a March 21 statement from the agency.

Some 4.3 billion or about 60% of the global population were living in Asia Pacific in 2012, UNESCAP noted, but the region has only about 38% of the world’s freshwater.

“As a result, the region has some of the lowest regional per capita water availability in the world,” the statement read.

Asia Pacific’s energy consumption was said to be lower than the global average, but UNESCAP expects this to rise “sharply” in the next 30 years given the demands of economic growth in the region.

“The growing challenges of the water-energy nexus require innovative and pragmatic solutions, application of the right technologies, and supportive economic enablers,” Ms. Akhtar said.

“These elements need to be integrated into national policies for more efficient and effective energy and water services.”

For his part, Dr. Gwang-Jo Kim, Bankok director for the UN Educational, Scientific and Cultural Organization (UNESCO), said: “Without improved cooperation between the water and energy sectors, the bleak reality is that sustainable development is unachievable.”

“The survival of the rich water-based cultures of the Asia-Pacific region and, indeed, our collective future depends on our ability to understand the connections between water and energy and develop policies that take an integrated approach to their management for sustainability,” Mr. Kim added.

The event in Bangkok also saw the regional launch of the UN World Water Development Report 2014 by the World Water Assessment Program (WWAP) under UNESCO. Previously released only every three years, the now-annual report took up the theme “Water and Energy” for 2014.

On the relationship between the two resources, the report stated: “The form of energy production being pursued determines the amount of water required to produce that energy. At the same time, the availability and allocation of freshwater resources determine how much (or how little) water can be secured for energy production.”

As demand for freshwater and energy increases in the coming decades, “the resulting challenges will be most acute in countries undergoing accelerated transformation and rapid economic growth, or those in which a large segment of the population lacks access to modern services,” the report also said.

The WWAP expects global water demand to increase by 55% by 2050, mainly because of growing demand from manufacturing, thermal electricity generation, and domestic use. This, in turn, is expected to strain freshwater availability, with over 40% seen to be living in areas of “severe water stress” through 2050.

The Philippines was shown to have the world’s second largest installed capacity for geothermal electricity in 2010 with 1,904 megawatts (MW). The United States, with 3,098 MW, had the largest, and the Philippines was followed by Indonesia with 1,197 MW.

Global energy demand is projected to grow by more than one-third by 2035, with 60% of the increase accounted for by China, India, and Middle Eastern countries, according to the report.

The WWAP also expects coal to remain Asia Pacific’s main source of energy, despite serious concerns about water quality degradation due to coal mining and the amount of water required to cool thermal power plants.

However, the report highlighted Asia Pacific’s potential to develop into a significant market for and exporter of biofuels. In particular, it noted: “India, the Philippines and Thailand are major new contributors to the biofuels industry.”

The region is seen to account for 20% of global ethanol production by 2015.

Worldwide, an estimated 768 million remain without access to improved water, the report stated, though the number could be as high as 3.5 billion. Some 2.5 billion people, meanwhile, lack access to improved sanitation.

More than 1.3 billion people were also said to lack access to electricity, while 2.6 billion were said to use solid fuels for cooking. source

Solving Phl energy woes? More power plants – DOE

By Iris Gonzales (The Philippine Star) | Updated March 23, 2014 - 12:00am

(First of two parts)

MANILA, Philippines - How do you solve the country’s power problem?

Energy Secretary Carlos Jericho Petilla, without hesitation, said the solution rests on the private sector building more power plants.

“It’s really the private sector that must build more plants,” Petilla told The STAR. And they have to build plants fast to keep up with rising demand.

“It is the private sector that can make EPIRA work by building more plants,” said Petilla, referring to the landmark power reform law, the Electric Power Industry Reform Act of 2001.

“I keep on telling them, if you want to make EPIRA work, build more power plants,” Petilla said.

To illustrate, data from power distributor Manila Electric Co. (Meralco) showed that in the period 2001 to 2013, the Luzon peak demand had grown by 2,659 megawatts or 47 percent, from 5,646 MW to 8,300 MW.

Yet, no new major base load plant has been constructed and added to the Luzon grid other than the coal-fired plant of GN Power in Mariveles, Bataan with a reported installed capacity of 652 MW and current dependable capacity of 495 MW.

Accordingly, demand has outgrown new base load capacity addition by around 2,000 MW during this period.

It was on June 8, 2001 that then President Gloria Macapagal-Arroyo signed into law Republic Act 9136, or the EPIRA, after more than seven years of public hearings and floor deliberations on various versions of the measure in Congress.

EPIRA promised many things but its biggest promise was to bring down electricity rates and to improve the delivery of power supply to end-users by encouraging greater competition and efficiency in the electricity industry.

“Consumers will be assured of adequate and reliable power supply at lower rates,” the Department of Energy (DOE) said in a briefer on the power reform law.

“There will be competition between and among generating companies where prices will be market-driven and competitive. There will be long-term contracts and a spot market where the trading of electricity between buyers and sellers will be undertaken,” the DOE paper said.

The signing of EPIRA came at a time when the Philippines depended largely on the National Power Corp. (Napocor), the state-owned power company, and its monopoly of the energy sector.

Thus, the restructuring of the energy sector called for the separation of the different components of the power sector such as generation, transmission, distribution and supply.

“The strategy is to put an end to monopolies that breed inefficiency, encourage the entry of many more industry players, and generate competition that will benefit consumers in terms of better rates and services,” the DOE said in the briefer.

It was the same scheme that worked in other countries, and was touted by the DOE to work just as well in the country.

“In other countries, a restructured and competitive power sector has provided consumers with lower power rates. We look around us and find that the same pattern can be seen in local industries that have been de-monopolized and deregulated like telecommunications and inter-island shipping,” it also said.

Under EPIRA, the government had envisioned that privatization would allow it to shift the burden of ensuring continuous financing for the construction, operation and maintenance of hugely capital-intensive, power-generating plants to the private sector.

Thirteen years later, however, electricity consumers are still reeling from high electricity cost. Things came to a head in December 2013 and January 2014.

Last December, the generation charge of Meralco rose to a record high of P9.10 per kilowatt-hour and to P10.23 per kwh in January 2014.

This was in contrast to the November 2013 rates of P5.67 per kwh and the monthly generation charge before that which hovered around the P5 per kwh level.

Acting on a petition from militant groups, the Supreme Court issued a temporary restraining order on the planned rate hike.

Market failure

After 13 years, EPIRA did not only fail to fulfill its promise, it also created an environment that led to market failure.

In a March 6 order issued after months of investigation, the Energy Regulatory Commission (ERC) said there was market failure at the Wholesale Electricity Spot Market (WESM) because some participants did not offer their full capacities, thereby affecting supply and pushing prices higher. WESM is the country’s trading floor for electricity.

“One reason that supply was low was because market participants did not offer their available capacity so there was market failure,“ said ERC executive director Saturnino Juan in a briefing on March 11 explaining ERC’s order.

A total of 2,035 MW in average capacity were not offered at the WESM during the one-month maintenance shutdown of the Malampaya natural gas plant, the ERC said.

Thus, the ERC declared the WESM prices during the period as void and ordered the Philippine Electricity Market Corp. (PEMC), operator of the WESM, to re-calculate the prices and issue revised bills to Meralco and other concerned distribution utilities.

The ERC said prices in WESM during the November and December 2013 supply months “could not qualify as reasonable, rational and competitive” and that in the “exercise of its police powers,” it was ordering the voiding of the Luzon WESM prices.

The ERC had ordered the PEMC to determine if generation companies violated market rules when they did not offer their full capacities in the market.

The WESM’s “must-offer rule” requires companies to declare and offer their maximum generating capacities to prevent supply shortage.

It was not the first time that inefficiencies in the market were spotted. In 2006, PEMC also found out that the Power Sector Assets and Liabilities Management Corp. (PSALM) committed anti-competitive behavior.

PSALM not blameless

The PEMC, through its Enforcement and Compliance Office (ECO) and Market Surveillance Committee (MSC), conducted an investigation into PSALM’s conduct at the WESM for the third billing month or in August 2006. PSALM is the government agency created by the EPIRA to privatize Napocor’s generating assets.

The MSC, in a memorandum report dated Nov. 20, found PSALM guilty of anti-competitive behavior and abuse of market power.

“PSALM, acting as one through its three trading teams, exercised market power. They were able to set the market price to a level that they wanted during peak hours. Since the production costs were well below the P10,000 per megawatt and above offered during the third billing month, they abused market power during the peak hours which market power would not have been there had the three trading teams acted competitively and independently with each other,” PEMC’s MSC said in its report.

At the time, PSALM’s three trading teams or the most frequent price setters in the market were KEPCO Ilijan, Pagbilao and Sual power plants. Three different teams but all under PSALM were trading all these plants.

However, the ERC eventually voided the findings of PEMC, saying there was no prima facie evidence to conclude that PSALM had indeed engaged in anti-competitive behavior.

But ERC warned Napocor and PSALM to refrain from engaging in conduct inimical to the objectives of free competition.

The STAR columnist Boo Chanco, who had worked for the then Ministry of Energy, said regulatory failure and not market failure was to blame for the problem.

“If you ERC guys were more alert in defense of the public interest, you would have seen market failure about to happen and would have taken steps to stop it from happening,” Chanco said.

EPIRA author Sen. Serge Osmeña said the law is a good one but lamented that the ERC has not been able to implement it well because it is full of political appointees.

The Philippine Chamber of Commerce and Industry, the country’s most influential business organization, submitted last month a list of proposed EPIRA amendments. It particularly urged Congress to strengthen the role of the ERC.

World Bank senior energy specialist Alan Townsend said ERC “in general is probably a bit too legalistic and process oriented and not driven enough (nor capable enough) by core economic aspects.” source

(Read Part 2)