Created:
19 October 2017
MANILA, Philippines —
The Senate committee on energy wants to review the market share limitation
under the Electric Power Industry Reform Act of 2001 (EPIRA) to reflect the
true state and foster competition in the power generation industry, Sen.
Sherwin Gatchalian said.
During the executive
seminar on fostering dynamic competition in the Philippine power industry,
Gatchalian said the metric used to determine market share limitations should be
reviewed.
Under the EPIRA, market share limitations prohibit generation companies from owning more than 30 percent of the installed capacity of a grid and more than 25 percent of the installed capacity of the national grid.
However, Gatchalian said using installed generating capacity as measure in computing market shares does not show the true dominance of a company, thus it needs to be revised.
“This is not reflective of the true market power of a company since the installed capacity is different from the power generated and injected into the grid,” he said.
In illustrating his point, the lawmaker said the share of coal in the country’s total installed capacity is approximately 35 percent but its share in actual generation is 48 percent.
For natural gas, its installed capacity is only 16 percent but its actual generation is 22 percent.
“As a consequence, the use of installed generating capacity underestimates the true market share of a company especially if its plants have comparatively higher capacity factors,” Gatchalian said.
Currently, the electricity industry shows the presence of dominant players and high retail rates, based on data gathered from the Department of Energy (DOE).
“Almost 60 percent of the installed energy capacity is controlled only by three firms,” Gatchalian said.
In his presentation, the lawmaker said First Gen Corp. of the Lopez Group corners 19.63 percent market share, the San Miguel Group with 18.73 percent share and the Aboitiz Group with 17.48 percent, totaling 55.84 percent for the three firms.
Meanwhile, the latest Power Development Plan 2017 to 2040 released by the DOE showed Philippine power rates remain one of the highest in Southeast Asia, at par with the level of Singapore, as of end-2016 due to continued lack of government subsidies.
In terms of electricity rates to industries, both countries have rates of P5.84 per kilowatt-hour (kwh).
But in terms of commercial and household rates, the Philippines has the highest at P7.49 per kwh and P8.90 per kwh, respectively.
Under the EPIRA, market share limitations prohibit generation companies from owning more than 30 percent of the installed capacity of a grid and more than 25 percent of the installed capacity of the national grid.
However, Gatchalian said using installed generating capacity as measure in computing market shares does not show the true dominance of a company, thus it needs to be revised.
“This is not reflective of the true market power of a company since the installed capacity is different from the power generated and injected into the grid,” he said.
In illustrating his point, the lawmaker said the share of coal in the country’s total installed capacity is approximately 35 percent but its share in actual generation is 48 percent.
For natural gas, its installed capacity is only 16 percent but its actual generation is 22 percent.
“As a consequence, the use of installed generating capacity underestimates the true market share of a company especially if its plants have comparatively higher capacity factors,” Gatchalian said.
Currently, the electricity industry shows the presence of dominant players and high retail rates, based on data gathered from the Department of Energy (DOE).
“Almost 60 percent of the installed energy capacity is controlled only by three firms,” Gatchalian said.
In his presentation, the lawmaker said First Gen Corp. of the Lopez Group corners 19.63 percent market share, the San Miguel Group with 18.73 percent share and the Aboitiz Group with 17.48 percent, totaling 55.84 percent for the three firms.
Meanwhile, the latest Power Development Plan 2017 to 2040 released by the DOE showed Philippine power rates remain one of the highest in Southeast Asia, at par with the level of Singapore, as of end-2016 due to continued lack of government subsidies.
In terms of electricity rates to industries, both countries have rates of P5.84 per kilowatt-hour (kwh).
But in terms of commercial and household rates, the Philippines has the highest at P7.49 per kwh and P8.90 per kwh, respectively.
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