Epira must not be ‘dramatically changed’


An economist believes that the government should not make drastic changes to Republic Act (RA) 9136 or the Electric Power Industry Reform Act (Epira), since this would decrease possible investments in the country’s power sector.

Victor Abola, economist at the University of Asia and the Pacific, told The Manila Times at the sidelines of the recent First Metro Investments Corp. press briefing that the current problems of the country’s power sector such as supply, quality and price hikes should be “resolved as soon as possible [while]still upholding the Epira law.”

Abola explained that with new power plants to come by 2015, a lot of investors are taking interest and planning to invest on the country’s power sector, given that they may not be shunned by drastic changes when it comes to the law and power pricing.

“It [problems]has to be resolved as soon as possible [while]upholding the Epira [law]. Otherwise, if you change the plan midway, it does not work. It is going to just prevent investments getting to the power industry, which is what we need,” the economist said.

“New power plants [are]coming in by 2015 but of course, a number of them will probably be adding 1,000 megawatt [supply]by 2016. But if the Epira is changed dramatically, we’ll have a disincentive to investors and a lot of people who are planning to get into the industry may not do so,” Abola added.

RA 9136 was signed on June 2001 by former president Gloria Arroyo.

It mandates lower electricity price rates and effective delivery of power supply to households and establishments.

Earlier, Energy Secretary Carlos Jericho Petilla mentioned the need to review and change the Epira law, as power suppliers are asking to raise electricity prices in the country to support the efficient delivery of power nationwide.

The Energy secretary’s statement was based on the earlier motion of power suppliers to increase household electricity prices by P4.15 per kilowatt hour, but was later stopped by the Supreme Court through issuance of temporary restraining order before the end of 2013.

Abola said that regardless of the issues, the country needs additional power investments.

“I think by 2018, we should expect a lot of these power projects to come in but we need continuous investments. If we’re growing by 7 [percent]to 8 percent [yearly gross domestic product growth], you need a lot more investments in the power industry and our present power generator may not be sufficient, that’s where foreign investments would come in,” Abola said.

“What is right, [then]we have to do is to make investors come in and precisely to create surplus, bigger buffer. If you have a bigger buffer, your electricity rates are not going to rise, probably going down and the fluctuations would be smaller,” he added, citing also the need to tame volatility of prices in the Wholesale Electricity Spot Market.


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