“There is no need to amend the Electric Power Industry Reform Act (EPIRA)” reverberated during the initial consultation conducted by the Department of Energy (DOE) with the industry players on the proposed alterations to the law.
The Philippine Independent Power Producers Association (PIPPA), an organization of the country’s power generators, as well as the Retail Electricity Suppliers Association (RESA), took common stand in opposing the planned revisions or scrapping of the power industry reform law.
Other industry stakeholders have noted that all the required levers and necessary safeguards to subvert abuses in the restructured electricity market are already in the law. The failing part had been on the implementation of key policies or in the appointments of the “wrong people,” if not the seeming incompetence of individuals who were tasked to head the energy sector’s critical agencies and entities.
On PIPPA’s part, it lodged to the DOE the various “fixes” that the government may enforce to address the current predicaments of the industry – and these were already anchored on the existing provisions of the EPIRA.
PIPPA president Luis Miguel Aboitiz similarly wrote Energy Secretary Carlos Jericho Petilla on the organization’s proposals “to prevent future increases in generation charges like those last November and December.”
These were the same recommendations made by the group in the EPIRA amendments’ consultation presided by Energy Undersecretary Raul Aguilos and DOE director Mylene Capongcol.
Primarily, the power generators propounded modification in the must-offer rule (MOR) of the Wholesale Electricity Spot Market (WESM), emphasizing that “most other markets around the world do not have must-offer rule.”
PIPPA said the market must “allow the plants that do not want to offer any capacity to be called on as a last resort without setting the market price.”
Additionally, the WESM must enforce “a day-ahead price discovery and allow plants that are not running to submit offers without being synchronized at minimum load.”
The power generators’ group also proposed a “switch to day-ahead delivery market, instead of the current hour-ahead,” as such had been the tested design for most power markets in the world.
It was emphasized that this “does not require any change of software, only a change in the rules.”
The other recommendations delve on the need for distribution utilities for a 100-percent supply contract cover for their peak demand, at least for the next three years and for them to not be penalized “if their actual load is less than what they contracted because their projections were not met.”
The rest of market policy fine-tuning being pushed are on the establishment of forward market for power as based on contracts for differences or CFDs; the enforcement of demand-side bidding as well as changes in the administrative pricing mechanism for WESM. source
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