August 23, 2018 | 8:58 pm
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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