Since 2001 when the EPIRA (Electric Power Industry Reform Act) Law was passed, it has metamorphosed into a law which cannot be depended upon to protect the interests of consumers. From a law that promised to solve the severe shortages of electric power in the early 2000s, it has been the subject of intense criticism particularly from the unions manning the cooperatives and the electric power consumers who complain of the high cost of electricity. .
What happened was the opposite of what was intended. The system was beset with many problems in all aspects from generation to transmission and to distribution. In fact, it appears that rather that protect consumers, this law, or what is lacking in the law, does not fully protect consumers but, on the contrary, makes life harder for them.
Affordable power has remained an elusive dream. Generation is monopolistic in nature although several companies are participating. The desired competition is non-existent and is on paper only while the truth is this industry is controlled by a few companies who tend to agree so they can corner large profits. They also appear to be using a large multi-billion peso lobby in Congress to promote their interest including the take-over of electric cooperatives such as what happened in Tagbilaran City, Bohol.
In a meeting, the RDC Technical Working Group on proposed amendments to the E-PIRA law, discussed the weaknesses of the law as observed now that it has been in implementation for 25 years.
A glaring defect of the law is the conspicuous absence of clear rules pertaining to the pricing of power generation and transmission. These are all left for the power producers to determine. In this sense, the term Energy Regulatory Commission is a gross misnomer.
From the discussion in the meeting, the tendency of power generating companies (who are also into transmission under the name National Grid Corporation of the Philippines, to achieve excessive profits at the disadvantage of the consumers was apparent.
For example, in LEYECO II, the payments to power plants which generate the electricity and the payment to the National Grid Corporation which takes care of transmission, account for 9 pesos per kilowatt hour of the 13 pesos paid by consumers as of May 2025.
The power companies owned by taipans and billionaires of the country are assured of high and substantial profits while operating the system like a monopoly.
The powers of the Energy Regulatory Commission do not delve on the profitability of the generation side of providing sufficient power to users.
Big business will necessarily target high rates of return since moderating their charges for generation is not directly tackled by the law.
At the heart of the problem is the concept of making the private sector control a captive market. However, in the past when the National Power Corporation controlled everything, it was riddled with corruption and with huge debts some of which are being paid by the consumers until today. Also, pricing was influenced by politicians who controlled government thereby making any increase in electricity rates very difficult. It meant losing or winning an election.
Now the electric cooperatives are allowed to invest in power plants but only up to 10 Megawatts of power in their areas of coverage. This rule is disadvantageous to the cooperative. Plants put up by cooperatives become competitors to big business plants and are understandably discouraged by the big companies. These self-owned power plants reduce the distance from power generators to the end-users thereby cutting costs send reducing the charge per kilowatt hour. This is why these practice should be encouraged, not curtailed.
There is a peculiar feature of the system which transfers a significant portion of payments as government charges reflected in our electric bill. Most consumers are not aware of this. For example, island areas which serve as locations for diesel-powered generators enjoy subsidies from the mainland consumers who shoulder part of the cost of energizing large numbers of households in these islands. These consumers may not be aware that part of their bill is for paying the cost of electricity in the islands. Ironically, some of these islands have well-capitalized Resorts.
The discussions also revealed that while the Tonogonan Geothermal Plants produce 800 megawatts of power, the total Eastern Visayas power demand is only 200 MW. When there are power outages, the Electric Cooperatives cannot get power from Tononan as these are supposedly covered by supply contracts from other Coops especially in Luzon. Obviously, an exemption to this provision is needed to favor the host region. Also, the private owner of the Tonogonan plants (the LOPEZ group) should coordinate with the electric cooperatives so that these are given priority in awarding of supply contracts. Geothermal power is one of the cheapest in the country.
Over the last 25 years, the weaknesses of the EPIRA law was unmasked. It was reliable to the extent of inviting investments from the private sector but these sweeteners have resulted in monopolistic actions of the investors. Power generation is invested with public interest. The tendency of private companies to maximize profits should be moderated by the need to provide affordable and competitive electric power rates.
There is need for balance, not a one-sided affair. Otherwise, the ship will sink.
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