Genealogy of Utility Regulation in the Philippines

Francisco S. Villa, Jr. Planning and Information Service Director

Continuing Regulatory Education for Stakeholders (CREST)

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Public Service Commission Commonwealth Act No. 146 (1936)

Transportation Communication

Power Water

Gas (pipes)

Transportation Communication Power, Water, Gas

National Water Resources Council

(NWRC)

Board of Energy (BOE) Power and Petroleum P.D. No. 1206 (1977)

Oil Industry Commission R.A. 6173 (1971)

Energy Regulatory Board (ERB) E.O. 172 (1987)

Energy Regulatory Commission (ERC) R.A. 9136 (2001)

Genealogy of Utility Regulation in the Philippines

Land Transportation Franchising and Regulatory

Board (LTFRB)

National Telecommunications Commission (NTC)

Board of Power and Water Works (BOPW) P.D. No. 1 (1972)

Significant Developments in the Energy Sector Oil Industry Commission (OIC)

Republic Act No. 6173 (April 30, 1971)

Board of Power and Waterworks (BOPW) Presidential Decree No. 1 (September 24, 1972)

Department of Energy (DOE) and Board of Energy (BOE)

Presidential Decree No. 1206 (October 6, 1977)

Energy Regulatory Board (ERB) Executive Order No. 172 (May 8, 1987)

Public Service Commission (PSC) was abolished by PD 1

OIC was abolished by PD 1206

BOE was reconstituted into ERB in May 8, 1987 by EO 172

Except  (1)  ECs  by  PD  269  –  NEA  &  (2)  the  NPC  by  RA  6395  

Republic Act No. 7638 The power to fix the rates of the National Power Corporation (NPC)

and the rural electric cooperatives (RECs) was passed on to the ERB

(December 28, 1992)

Republic Act No. 8479 Downstream Oil Industry Deregulation Act of 1998

(February 10, 1998)

E.O. 471 The Philippine oil industry was fully deregulated, thus,

ERB’s focus of responsibility centered on the electric industry (June 12, 1998)

Republic Act No. 9136 Electric Power Industry Reform Act (EPIRA) of 2001, abolished the ERB

and created in its place the Energy Regulatory Commission (ERC) (June 8, 2001)

REFORMING

THE

ELECTRIC POWER

INDUSTRY

Republic  Act  No.  9136  

Electric  Power  Industry  Reform  Act  (EPIRA)  

Signed:  8  June  2001      EffecHvity:  26  June  2001  

ImplemenHng  Rules  &  RegulaHons   Signed:  27  February  2002  

The  11  Declarations:  

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1.  To ensure and accelerate the total electrification of the country;

2.  To ensure the quality, reliability, security and affordability of the supply of electric power;

3.  To ensure transparent and reasonable prices of electricity in a regime of free and fair competition and full public accountability to achieve greater operational and economic efficiency and enhance the competitiveness of Philippine products in the global market;

SECTION  2.  Declaration  of  Policy.  –  It  is  hereby  declared  the  policy  of  the  State:    

4.  To enhance the inflow of private capital and broaden the ownership base of the power generation, transmission and distribution sectors;

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5. To ensure fair and non-discriminatory treatment of public and private sector entities in the process of restructuring the electric power industry;

6.  To protect the public interest as it is affected by the rates and services of electric utilities and other providers of electric power;

 

SECTION  2.  Declaration  of  Policy.      The  11  Declarations:  

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7.  To assure socially and environmentally compatible energy sources and infrastructure; 8.  To promote the utilization of indigenous and new and renewable energy resources in power generation in order to reduce dependence on imported energy; 9.  To provide for an orderly and transparent privatization of the assets and liabilities of the National Power Corporation (NPC);

 

SECTION  2.  Declaration  of  Policy.      The  11  Declarations:  

Cebu City 10 July 10

10.  To establish a strong and purely independent regulatory body and system to ensure consumer protection and enhance the competitive operation of the electricity market; and

11.  To encourage the efficient use of energy and other modalities of demand side management.

 

SECTION  2.  Declaration  of  Policy.      The  11  Declarations:  

RETAIL COMPETITION

& OPEN ACCESS

R.A. 9136 (EPIRA) The BLUEPRINT of

the electricity industry.

RESTRUCTURING

PRIVATIZATION

ObjecHve  of  EPIRA  

The  Journey  

Title of Presentation 12

Transfer of NPC-IPP Contracts

Privatization of NPC

Establishment of WESM

Cross Subsidy Removal

Unbundling of Rates

Open Access and Retail

Competition

RESTRUCTURING  

DISTRIBUTION TRANSMISSION POWER PLANTS & IPPs

END USERS

END USERS

SYSTEMS OPERATIONS

NATIONAL POWER CORPORATION

•  18 PRIVATE UTILITIES •  2 LOCAL GOVERNMENT UNITS •  120 ELECTRIC COOPERATIVES

OTHER IPPs

Before  the  reforms…  

RESTRUCTURING

AWer  the  reforms…  

DISTRIBUTION TRANSMISSION

POWER PLANTS & IPPs

END USERS

END USERS

SYSTEMS OPERATIONS

NATIONAL TRANSMISSION CORPORATION

NGCP

•  20 PRIVATE UTILITIES •  120 ELECTRIC COOPERATIVES

OTHER IPPs

RE SOURCES Solar, ROR Hydro, Wind, Biomass, Ocean

MARKET OPERATOR

SUPPLY

GENERATION SUPPLY DISTRIBUTION TRANSMISSION

RESTRUCTURING  

Performance Based Regulation Benchmarking

Competition at the wholesale & retail level

RESTRUCTURING  

Generators

NGCP/ TRANSCO

Distribution Utility

End-users

ExisHng  contractual  arrangements  

RESTRUCTURING  

Generators

NGCP/ TRANSCO

Distribution Utility

End-users

RES

WESM

TransacHon  flow  under  Open  Access  Regime  

Our  MANDATE  

Sec.  38  of  EPIRA    

“There  is  hereby  created  an  independent,  quasi-­‐judicial  regulatory  

body  to  be  named  the  Energy  Regulatory  Commission  (ERC).”  

ERC’s  MAJOR  FUNCTIONS  –  Sec.  43  EPIRA  

Promote competition

Monitor the Market

Encourage market

development

Ensure customer

choice

Penalize abuse of

market power

Our  MAJOR  FUNCTIONS  Generation Transmission

Distribution Supply

§  Certificate of Compliance §  Generation tariffs = Bilateral power supply contracts §  Feed-in-Tariffs (RE) §  SPUG (Missionary Electrification) § WESM monitoring § Competition Rules

§  Tariffs of NGCP §  Philippine Grid Code §  CAPEX plans §  Ancillary services

§  Suppliers’ licenses §  Issuance of needed rules for retail competition § Declaration of open access and retail competition

§  Tariffs of distribution utilities §  Philippine Distribution Code §  Lifeline rate §  Franchise for consortium of sub- transmission assets §  Stranded contract cost

§  Systems loss §  CPCN §  Spot inspections/ audits §  Bilateral power supply contracts § CAPEX plans § Magna Carta and DSOAR enforcement

Natural Monopolies Competitive

Our  ORGANIZATION  COMMISSION

Chair Commissioner

General Counsel & Secretariat of the Commission

Chief Executive Officer (Chair)

Financial and Administrative Service

Regulatory Operations Service

Legal Service Planning and Information Service

Market Operations Service

Consumer Affairs Service

Internal Audit Unit

Executive Director Field Offices Investigation & Enforcement

Division

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