Today, January 27, 2015 Congressional inquiry into the Electric Power Industry Reform Act (EPIRA), with various proponents calling for its repeal, overhaul and amendments, the Freedom from Debt Coalition reiterates its basic positions why it has been calling for EPIRA’s repeal, the junking of the government’s privatization policy and the public control of the power industry, among other demands towards making energy accessible, safe, sustainable, democratic and in the service of the people and the country’s need for real economic development.

Since the bill that became EPIRA was deliberated on the Congress floor, FDC has strongly opposed it. FDC has warned Congress and our people again and again, year after year, that privatization cannot deliver the promises of EPIRA. On the contrary, EPIRA would drive the power industry down to perennial crisis. Now, thirteen (13) years after its enactment, EPIRA is one big broken promise.

EPIRA’s Declaration of Policy from Policy A to K (Section 2) is in shambles. Instead of “transparent and reasonable prices of electricity in a regime of free and fair competition and full public accountability” (Section 2-C) we have the highest residential electricity rate in Asia and the fifth highest in the world and the second highest industrial electricity rate in Asia. At the rate power hikes occur in our country, we might end up having the most expensive electricity in the world.

After 13 years of EPIRA,

  • instead of free and fair competition “ The power industry fell into the hands of a monopsony of the big 3 – First Gen ofLopez, Aboitiz Power and San Miguel Power for power generation, a monopoly of MERALCO in power distribution and the control by a private company NGCP of the transmission sector which is owned by Henry Sy and the Chinese government
  • planning of the power industry has been abdicated by the Government to the private sector. If the private generation companies are not willing to invest into more power plants, or if there are no takers from the private sector, the government under EPIRA does nothing.
  • the monitoring of the power supply and the upkeep of the transmission sector is transferred into the hands of a private company, Henry Sy’s NGCP which is co-owned by the Chinese government.
  • the power spot market, WESM , that was established to promote competition to lower electricity prices has become an easy arena for gaming by big three generation companies who control more than 60 percent of the country’s installed and dependable capacity and by Meralco who also sells its contracted power supply. It is a contrived market where prices are high.
  • the central regulatory body, the Energy Regulatory Commission, has become a classic case of regulatory capture by the generation monopsony and the monopolies in the distribution and transmission sectors.
  • MERALCO’s long-time monopoly of power distribution in Luzon has given it free rein to commit predatory pricing and market abuse, apart from a long list of examples of corporate greed.

The shift to sustainable energy is very slow and is in real danger of being controlled by again by the big 3, foreign investors and other private corporations. Electric cooperatives, instead of being assisted and conditioned to democratize and be efficient are pressured to privatize with the big 3 and other foreign companies waiting to take hold of them.

In sum, FDC has been calling all these years for: (1) breaking the private monopolistic/monopsonistic hold of a few big private corporations on the power generation, transmission and distribution industry brought about by EPIRA; (2) bringing back State planning in building and developing the power industry; (3) restoring the role of the State as a major player in both generation and distribution sectors and renationalizing the management and operation of the transmission sector; (4) promotion of democratic and efficient electric cooperatives as a social partner of the State in developing the power industry; and (5) ensuring a steady and sure transition to sustainable energy.

While some of these issues may be addressed by certain amendments, so long as the power industry is privatized and under the sway of private monopsony and monopoly which is what EPIRA in substance did, these amendments will be rendered inutile and meaningless. FDC believes that nothing less than the REPEAL OF EPIRA and the institution of public control over the power industry is the rightful path to a secure, safe, efficient and affordable energy to our people.

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