Lawmaker wants cross-ownership in power sector banned

By Jess Diaz (The Philippine Star) Updated January 23, 2012 12:00 AM


MANILA, Philippines - Eastern Samar Rep. Ben Evardone filed a bill yesterday to prohibit cross-ownership among companies producing and distributing electricity.


The Electric Power Industry Reform Act (EPIRA) of 2001 does not ban cross-ownership among these companies. What it prohibits is the acquisition of shares by these companies in the National Transmission Corp. (TransCo) or its concessionaire.


In Bill 5678, Evardone said it has been more than 10 years since Congress enacted EPIRA and the promised reduction in electricity rates has not been realized.


“What is worse is that the effects are in contrast to the very purpose of enacting the EPIRA. Instead of going down, electricity rates have increased significantly since 2001,” he said.


Citing studies, he said rates of Meralco, the country’s biggest power distributor, jumped by 112 percent, while the rates being charged by the state-owned National Power Corp. are now 95 percent highest than they were 10 years ago.


Instead of the ownership of generating companies being dispersed, only three groups – San Miguel Corp., the Aboitizes and the Lopezes – control 52 percent of power generation, he added.


“The EPIRA has obviously only harnessed the domination of only a few corporations in both the generation and distribution to the detriment of the Filipino power consumers. This can be attributed to the watered-down safeguards against monopoly in the electricity sector,” he stressed.


Evardone noted that while EPIRA bans generation and distribution companies from having any ownership interest in TransCo, the law does not prohibit cross-ownership among generators and distributors.