Epira Law ‘onerous, very oppressive’

ILOILO City – The National Grid Corporation of the Philippines (NGCP) continued to reap a whirlpool of criticisms from the legislators, who even called for the review or revision of the Philippine Grid Code and the Electric Power Industry Reform Act (Epira) to prevent a repeat of the power outage that struck Panay Island last Jan. 2.

Iloilo City Councilor Romel Duron sponsored a resolution requesting President Ferdinand Marcos Jr. to certify as “urgent” the passing of a law amending or repealing the Epira Law.

Association of Philippine Electric Cooperatives partylist’s Rep. Sergio Dagooc also called on the government to establish the separation of the grid system operator and transmission system operator, particularly in the Visayas.

E pi ra Law aims to restructure the country’s electric power industry. It was passed to ensure and accelerate the electrification of the country to attain “reliability, quality, security, and affordability of the supply of electric power.”

The l aw also aims at promoting the “utilization of indigenous and new and renewable energy resources in power generation to reduce dependence on imported energy.

The law also seeks to establish a strong and i ndependent regulatory body and system to ensure consumer protection and enhance the competitive operation of market power.

Enacted in 2001, the Epira Law aims to provide “better and stricter regulation and government of electricity generation, transmission, distribution and supply.”

But why is the Epira Law deemed as disadvantageous to the end-users?

Section 34 of Epira Law provides that the universal charge shall be imposed on all electricity end- users as provided in its “universal charge.”

Payment for financial obligation f or stranded debts and stranded contract costs of NGCP and qualified distribution utilities resulting from the restructuring of the industry include missionary electrification, taxes and royalties applied to indigenous or renewable sources of energy imported energy fuels, and all forms of cross-subsidies for a period not exceeding three years.

For Councilor Duron, Section 34 of the Epira law is “very oppressive” because it would only pass all its expenses to end-users.

“We have to amend the Epira Law because it is onerous. It is favorable to them,” he said, adding that Iloilo City suffered at least P2 billion in losses due to the power outage on Jan. 2.

Meanwhile, the Department of Energy (DOE) has asked the NGCP to implement the Transmission Development Plan ( TDP), which outlines essential expansion and modernization projects for the transmission system to ensure the reliable and efficient delivery of electricity throughout the country.

The TDP also complements the projected load growth and generation expansion, including the capacity additions from renewable energy ( RE) in line with the target of a minimum 50 percent generation mix by 2040 and beyond.

The four- day blackout on Panay Island could have been prevented had the NGCP completed on time the 230 kV Cebu-Negros-Panay (CNP) Backbone project, a major part of the TDP.

Based on the 2016 TDP, the NGCP was supposed to have completed the CNP 230 kV Backbone Project in 2020, but the completion date has been delayed at least seven times from the original completion date of December 2020.

As of October 2023, the said project is 99.64 percent completed, but the estimated completion time is yet to be assessed based on the Transmission Project Status Report October 2023 update.

To recall, the Energy Regulatory Commission ( ERC) issued a show- cause order against the NGCP in July 2023 over delays in 37 transmission projects. The ERC said that the NGCP failed to meet its proposed timelines to complete the projects.

Some of the long-delayed transmission projects in the

Visayas region include Stages 2 and 3 of the CNP 230 kV Backbone Project, CebuLapu Lapu Transmission Project, Mindanao-Visayas Interconnection Project, Naga ( Cebu) Sub- station Upgrading Project, Tagbiliran 69 kV Substation Project, Visayas Voltage Improvement Project.

“While the NGCP claimed that multiple outages of power plants caused the blackout, the tripping of PEDC (Panay Energy Development Corp.) 1 already signaled the need for NGCP to take action, which they failed to do, given the fragile nature of Panay,” said DOE assistant secretary Mario Marasigan.

The DOE will continue to monitor the compliance of NGCP with the various directives relative to the immediate and hopefully permanent resolution of the Panay power supply issue./