Competition and power

moving towards a more competitive ranking, taking into context, the role of cost of electricity (electric power)*.

A report from the Energy Economics Institute of Japan showed that the Philippines has the most expensive power! In 2011, the average price of power among ASEAN countries was only US$13.49/kWh, against the Philippines US$24.83/kWh. In 2013 Global Benchmark Study of Residential Electricity Tariffs by Lantau Group, among 14 major cities in North and Southeast Asia, Manila ranked third to Sydney and Tokyo, as the city with most expensive electricity.

In making the cost of power more competitive, the market requires wellbehaved players on both demand and supply side and, a fair, proactive, and reasonable referee that keeps the scale balanced. Over the years, the market for electricity or electric power in the Philippines has been like a game of tug of war – with the opposing forces pulling to make the market more or less competitive. In this game are the electricity consumers – industrial, commercial, and residential; the players that are responsible for producing and conveying electricity to the end-users – the power generation companies (GenCos) the transmission company, and the distribution utilities, which are either privately owned utilities or governmentsupported electric cooperatives; and the government agencies - the policy-maker and implementer that must encourage competition (Department of Energy and its attached agencies) and the regulator (Energy Regulatory Commission) that clips anti-competitive actions.

Competition is a double-edged word depending on which side of the economy or a market you are on. For many of us belonging to the demand-side of the spectrum, competition is good optimal value, that is, the best quality of power at the most reasonable price. To those that must produce and deliver the power to our homes and businesses, the goal is to recover capital and earn enough returns on investment. Our country has been experiencing the era of reformed – liberalized, deregulated, restructured – markets since the EDSA Revolution. With each new administration, the President had brought with him or her an arsenal of policies aiming to unleash economic power that had once been vested in only a few select ones, and ultimately envisioning a supposedly more dynamic economy founded on competition. In the energy sector, the one that started it all was the Oil Industry Deregulation Act back in 1998 and its subsequent sibling, the Electric Power Industry Reform Act (2001). With the recent passage of RA 10667 – National Competition Policy, the country awaits with bated breath the competition.

The concentration of power (in the power industry) can lead to higher cost of power. As they all say, “power corrupts and absolute power corrupts absolutely. ”In the Philippines, since passage of landmark laws – OIDA and EPIRA – the country has seen some positive changes; there is hope. Over the last three decades that I have worked in the energy sector, I bear (ODA) partners like the United States Agency for International Development (USAID) and some players like is directly translated in their actions. I look forward to see how the current administration of President R. Duterte will roll out competition in power.

*Physics tells us that power is “the rate of change in energy.” In a more general context, however, power refers to the energy that can be produced by mechanical and electrical means, among others. Electricity is that form of energy that is produced by electrical means or be used in the context of various sources and methods of generating the energy, whereas electricity can only be used in reference to electric power. (