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EPIRA needs way to sanction weak power franchises — NGO

LEGISLATORS should amend the power industry law to give regulators the authority to revoke franchises of underperforming concession holders, an industry advocacy group said.

“Our policy makers should consider revising Section 27 Franchising Power in the Electric Power Sector of the EPIRA (Electric Power Industry Reform Act)… to address problematic electric cooperatives that have consistently underperformed for 10 years or more… suggesting the potential revocation of their franchises,” Nic Satur, Jr., chief advocate officer of Partners for Affordable and Reliable Energy, told BusinessWorld via chat.

Congress is currently looking to amend EPIRA, noting its failure to lower the cost of electricity.

“It is important to recognize that access to affordable and reliable energy is not a privilege but a fundamental right… which should not be undermined by the poor performance of certain electric cooperatives,” Mr. Satur said.

He said consumers are dealing with inconsistent access to power due to the “inefficiency or mismanagement” of underperforming electric cooperatives.

Congress should also look at strengthening a section deterring anti-competitive behavior among electric cooperatives, he added, referring to it as a “significant threat to market fairness.”

House Bill (HB) No. 3430 seeks to strengthen the clause by stiffening regulations governing cross-ownership by restricting the ownership of a power distributor in a transmission company to 15% from 30%.

“The clause remains weak in practice as cross-ownership is only prohibited between the transmission company and any company in the other two sectors,” according to the explanatory note of HB No. 3430.

“Currently, large private distributions are able to enter sweetheart deals with affiliated power generators which give them control over pricing and market behavior, to the detriment of consumers,” it added.

EPIRA divided the power industry into four sectors under the law: generation, transmission, distribution, and supply; however, it only prevented cross-ownership among transmission, generation, and supply entities, Party-list Representatives Sergio C. Dagooc and Presley C. de Jesus, authors of the bill, said in the explanatory note.

Strengthening cross-ownership regulations would prevent market manipulation as well as ensure the competitiveness of the energy sector, Mr. Satur said.

Amendments to EPIRA are among the priority bills set by Philippine President Ferdinand R. Marcos, Jr. for the 19th Congress.

House bills seeking to amend the EPIRA Act remain pending at the House Committee on Energy. — Kenneth Christiane L. Basilio