Wednesday, August 29, 2018

Energy dep’t seeking stakeholder comment on draft EPIRA IRR amendments



THE Department of Energy (DoE) is soliciting comment on draft amendments to the implementing rules and regulations (IRR) of the law that restructured the energy sector, which privatized power generation, transmission and distribution.
In its draft IRR of Republic Act No. 9136 or Electric Power Industry Reform Act (EPIRA) of 2001, the DoE set down a more defined role for the department, the Energy Regulatory Commission (ERC) and other energy-related government agencies, including the National Electrification Administration (NEA).
The amendments are intended to prepare electric cooperatives (ECs) for an environment of open access and retail competition, adding to the responsibilities of NEA, the agency that oversees the ECs.
“For this purpose, NEA shall: Assist the ECs in developing proposals… regarding policies and regulations of the electric cooperatives such that the same would allow ECs to operate efficiently and be able to recover prudent cost of services and operations including guarantees and enable ECs to achieve and maintain viability,” the draft states.
The NEA is also mandated to review and endorse for DoE approval the distribution development plan of each EC containing programs for capital expenditure, full energization of unserved and underserved areas, and rehabilitation plan for ailing cooperatives.
The agency is also mandated to prepare and submit for DoE approval an annual report on the performance of electric cooperatives.
The DoE sought to strengthen the technical capability and financial viability of ECs by conducting an annual institutional, technical and financial audit of all electric cooperatives, and require and enforce a compliance plan.
NEA is also to ensure compliance by the electric cooperative board of directors and management to the performance standards approved by the DoE and enforce sanctions and penalties for non-compliance.
A new provision called for the NEA, as guarantor and loan institution for the electric cooperatives, to ensure that all returns for such undertakings be devoted to activities necessary to achieve the objectives of EPIRA, primarily the total electrification of the country.
In the 23-page draft amended IRR, the DoE added “services” as among those for ERC approval in terms of expansion or improvement of transmission facilities by National Transmission Corp. (TransCo), with due regard to the TDP (transmission development plan) duly approved by the DoE and integrated in the power development program.
The DoE said the ERC approval should correspond only to prudent cost recovery by TransCo or its buyer or concessionaire.
On rate applications or petitions for rate adjustment, the DoE said that if no provisional approval is applied for or issued, the ERC should decide on the merits of the filing not later than 15 months from submission.
“If no decision is issued within the 15-month period, the application or petition shall be deemed approved,” the draft states.
The ERC is also directed to promulgate rules and regulations governing electricity suppliers on their conduct of abuse of market power, cartelization and other anti-competitive and discriminatory behavior.
For TransCo, the draft IRR allowed the company to operate, maintain and development the transmission system in any small power utilities group (SPUG) area that has been identified by the DoE as viable. The area should be connected to the main grid subject to the approval of the ERC.
TransCo may also directly or indirectly engage in any related business that maximizes the use of its assets, provided that 50% of the net income derived from such undertaking should be used to reduce wheeling rates as determined by the ERC. Wheeling rate is the charge for transporting electricity from an electrical grid to an electrical load outside the grid. — Victor V. Saulon

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