More than 22 years since the passage of the Electric Power Industry Reform Act (EPIRA) or Republic Act No. 9136, the vision of an affordable, competitively-priced, and secure electricity supply has remained elusive. Energy insecurity remains a major impediment to sustainable economic growth and competitiveness, with high power prices—considered as one of the most expensive in Asia—having knock-on effects on investments, industry growth, and consumer welfare.
Notwithstanding the rapidly rising demand and the country’s dependence on imported fuel, other factors also explain why electricity prices in the country continue to be expensive, namely (i) the looming depletion of the Malampaya natural gas, (ii) market power and cross ownership issues, (iii) red tape and bureaucratic inefficiencies, (iii) taxes and subsidies, (iv) an inadequate transmission, (v) energy transition to renewables, and (vi) weak power sector governance, among others.
Despite the passage of key power sector reforms in recent years, there is much to be desired in improving the overall efficiency of the power sector. For one, the Marcos Jr. administration targets to reduce the cost of electricity to achieve the vision stated in the Ambisyon Natin 2040, specifically by amending the EPIRA amid criticisms of its ineffectiveness in reflecting the efficient cost of power, market collusion, and inadequate power supply. Legislating some of these reform initiatives such as the competitive selection process (CSP), strengthening power sector governance of the DOE and ERC, among others, under the proposed EPIRA amendments, including the proposed review and amendments to the NGCP franchise and other tax reforms affecting the power sector should be prioritized.