3POWER FAILURE: 10 years of EPIRA
n June 8, 2001, then President Gloria Macapagal-Arroyo signed the Electric Power IndustryReorm Act (EPIRA). Despite strong opposition rom various sectors, EPIRA was railroadedby the congresional allies o Malacañang. We were assured then that among other benets,power rates in the country will go down. But ater 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 transerred 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 powerulsince they now own the generation plants as well. The result ater 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. Ater 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 transer o monopoly rom the state to a ew private corporations exposed the pretense o EPIRAabout ostering competition or the benet 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 eort 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.