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POWER FAILURE: 10 Years of EPIRA

POWER FAILURE: 10 Years of EPIRA

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Published by Maui Hermitanio
by BAYAN, Agham
by BAYAN, Agham

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Categories:Types, Research
Published by: Maui Hermitanio on Mar 28, 2012
Copyright:Attribution Non-commercial

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01/09/2013

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POWER FAILURE:10 years o EPIRA
A people’s review on the impact o theElectric Power Industry Reorm Act o 2001
 A coordinated research project byPeople Opposed to Warrantless Electricity Rates (POWER)Bagong Alyansang Makabayan (BAYAN)IBON Foundation Inc.AGHAM Advocates o Science and Technology or the People
June 2011
 
2POWER FAILURE: 10 years of EPIRA
 TABLE OF CONTENTS
Introduction.........................................................................................page 3Soaring power rates amid energyinsecurity under EPIRA.....................................................................page 4Napocor: still deep in debt ater a decade o Epira...............page 10Ater a Decade o EPIRA:Private Power Monopolization.....................................................page 20Appendixpage 35
Regional Case Study on Power CampaignKampanya laban sa pribatisasyon ng electric cooperativesNotes on the state o power privatization and people’s campaign in Central Visayas
 
3POWER FAILURE: 10 years of EPIRA
Introduction
O
n June 8, 2001, then President Gloria Macapagal-Arroyo signed the Electric Power IndustryReorm Act (EPIRA). Despite strong opposition rom various sectors, EPIRA was railroadedby the congresional allies o Malacañang. We were assured then that among other benets,power rates in the country will go down. But ater a decade o EPIRA, Filipinos are being burdenedwith the most expensive electricity in Asia.EPIRA systematized and expanded the privatization and deregulation o the power sector. Itcompletely transerred the control and administration o generation plants to private companies. Italso privatized the transmission o power rom the generation plants to distribution utilities (DUs). Thus, private corporations, which have long controlled the DUs, have become even more powerulsince they now own the generation plants as well. The result ater 10 years:
•
Power rates have doubled since EPIRA was implemented. MERALCO rates have increased bymore than 112 percent while NAPOCOR rates have jumped by more than 95 percent in thepast 10 years.
•
More than hal o the total generation capacity, the entire transmission system and a largepart o distribution, are now controlled by a ew large companies. Ater privatization, onlythree groups control 52 percent o generation capacity – San Miguel Corporation (SMC),Aboitiz, and Lopez.
•
NAPOCOR remains indebted despite paying billions o debts over the past 10 years. From2001 to 2010, NAPOCOR shelled out $18 billion to service its nancial obligations. Yet, rom$16.4 billion in 2001, NAPOCOR’s debts remained high at $15.8 billion as o 2010.
•
Energy security is threatened while people are expected to pay more or electricity in thecoming years. The power situation in Mindanao remained precarious while additional chargesto recover NAPOCOR’s stranded debts and stranded contract costs are looming. The transer o monopoly rom the state to a ew private corporations exposed the pretense o EPIRAabout ostering competition or the benet o consumers. Due to monopolies over generation anddistribution, or instance, the so-called unbundling o rates to make the electricity bill transparent hasbecome a meaningless exercise. Free competition through the wholesale electricity spot market (WESM)is also a sham because o virtual monopolies and cross-ownerships between distribution utilities andpower generators. More than hal o total generating capacity is now controlled by just three privatecorporations and this is share expected to increase upon ull privatization o the industry.
Power Failure: Ten Years of EPIRA
is an attempt to analyze and summarize the impact o EPIRA inthe past 10 years. Through this, we wish to bring to the attention o government and legislatorsthe urgent need to rethink and reverse the policy o privatization and deregulation o the powerindustry, and work or the repeal o EPIRA. This report is a product o the collective eort o the People Opposed to Warrantless Electricity Rates(Power), Bagong Alyansang Makabayan (Bayan), Ibon Foundation Inc., and AGHAM (Advocates o Science and Technology or the People) as well as contributions rom the people’s organizations andconsumer groups campaigning against power privatization in Southern Mindanao, Bicol, and CentralVisayas regions.

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