OVERVIEW OF THE

PHILIPPINE POWER
INDUSTRY

03 OCTOBER 2021
 HOW IS ELECTRICITY DELIVERED FOR CONSUMERS?

Power
Plant
Transmission
Lines (NGCP)

Electricity is traded by sellers (generators) and buyers (DU and other

customers) in the WESM prior to production and delivery.

Distribution Lines Distribution Lines

(Distribution (Distribution Directly
Utility) Utility) Connected
Customers
Embedded
Power
Plants
End-Users End-Users

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OVERVIEW OF PHILIPPINE POWER INDUSTRY
How is power delivered to customers?

500 KV
34.5 KV
13.8 KV
230 V

DISTRIBUTION
GENERATION TRANSMISSION SYSTEM END USER
SYSTEM

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 OVERVIEW OF PHILIPPINE POWER INDUSTRY

Generation Companies

Authorized by the ERC to operate facilities used in the

generation of electricity.

A Generation Company may have facilities that use the following

resources:
• Natural gas
• Geothermal
• Hydro
• Coal
• Diesel / Oil
• Biomass
• Wind
• Solar
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OVERVIEW OF PHILIPPINE POWER INDUSTRY

Generation Companies

SOLAR BIOMASS HYDROELECTRIC

DIESEL GEOTHERMAL NATURAL GAS

NUCLEAR COAL WIND

OVERVIEW OF PHILIPPINE POWER INDUSTRY

Customers

Customers in the WESM may be

• Distribution Utilities
• Directly-connected customers (Bulk
customers)
• Retail Electricity Suppliers
• or Contestable Customers (End-
users).

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 OVERVIEW OF PHILIPPINE POWER INDUSTRY
Philippine Transmission System
Leyte-Luzon HVDC link: Interconnects
Luzon and Visayas Transmission System
Visayas-to-Luzon = 420MW
Luzon-to-Visayas = 250MW
Luzon:
230 kiloVolt and 500 kiloVolt
backbone transmission System

Visayas:
Leyte-Cebu AC submarine cable link -138 kiloVolt and 230 kiloVolt
(2x200 MW) (Cebu Only)
backbone transmission System

Leyte-Bohol AC submarine cable link

Negros-Panay AC submarine cable link
(90 MW)
(180 MW)

Mindanao:
138 kiloVolt and 230 kiloVolt
Cebu-Negros AC submarine cable link backbone transmission System
(2x90 MW)

Mindanao Visayas Interconnection Project

HVDC (450MW)

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POWER INDUSTRY PARTICIPANTS
Before 2001
Generation Companies Independent Power Producers

Transmission System Operator • Scheduling

• Pricing
• Dispatch
• Settlement

Distribution Utilities /
Directly-Connected
Customers (DCC)

- regulated

Note: Lists of IPPs and DUs are non-exhaustive. 8

ELECTRIC POWER INDUSTRY
Transition to competitive regime

Electric Power Industry

Reform Act (EPIRA)

➢ Generation is
competitive and open

➢ Establishment of the
Wholesale Electricity
Spot Market (WESM)

➢ Transmission and
distribution are
regulated services

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POWER INDUSTRY PARTICIPANTS
After 2001
Generation Companies

• Scheduling
Market Operator
• Pricing
• Settlement

Transmission System Operator

• Dispatch of Generators
• O&M of Transmission

Distribution Utilities / DCCs Retail Electricity Suppliers

- regulated - competitive
Note: Lists of GenCos, DUs, and RESs are non-exhaustive. 10
INDUSTRY RESTRUCTURING
Monopoly (Pre-EPIRA) New Structure (EPIRA)

NPC NPC NPC IPP

NPC

DU EC Direct DU

Customers

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INDUSTRY RESTRUCTURING
What is the role of the WESM?
Pre-EPIRA
NPC manages dispatch of its plants L

Transmission
System L

All settlements are with NPC

L

IPP Central platform for dispatch L

scheduling

IPP Transmission
System L

IPP Central mechanism for accounting of all

transactions L
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EPIRA
HOW ARE DISPATCH SCHEDULES IMPLEMENTED?

NGCP dispatches
the generators
based on IEMOP’s
submission.

IEMOP submits Electricity is produced

resulting generator (generators) /
schedules to NGCP. consumed
(customers).

The DUs, participating in the WESM as wholesale

customers, distribute electricity to the end-users.

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WESM ESTABLISHMENT
Before Retail Competition
Before Retail Competition

Transmission All transactions

Charges go through the DUs

Transmission Distribution

Spot
Payment
Generation
Charges

Spot All Customers

Payment
Generation

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WESM ESTABLISHMENT
With Retail Competition and Open Access (RCOA)

Transmission
Charges

Transmission Distribution Customers

Spot Retail Competition

Payment
Generation
Charges
Transact in the WESM

Spot
Payment DU Charges
Generation
Contestable
Generation Charges
Spot Customers
Payment

Suppliers

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WESM ESTABLISHMENT
With Retail Competition and Open Access (RCOA)

EPIRA Section 30

WHOLESALE

RETAIL

EPIRA Section 31

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RA 9136 – EPIRA LAW
Background and Legal Basis
New Structure
• Generation
o Competitive; privatized
• Transmission
o Regulated; privatized
o Includes systems operations functions
• Distribution
o Regulated; privately-owned & electric cooperatives
• Retail/Supply
o Competitive

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RA 9136 – EPIRA LAW
Background and Legal Basis
Related Provisions - Generation
Section 6, RA 9136
• Generation of electric power, a business
affected with public interest, shall be
competitive and open.

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RA 9136 – EPIRA LAW
Background and Legal Basis
Related Provisions - Transmission
Section 7, RA 9136
• The transmission of electric power shall be
regulated common electricity carrier
business, subject to the ratemaking
powers of the ERC.

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RA 9136 – EPIRA LAW
Background and Legal Basis
Related Provisions - Transmission
Section 9 e, RA 9136
• Subject to technical constraints, the grid
operator of the TRANSCO shall provide central
dispatch of all generation facilities connected,
directly or indirectly, to the transmission system
in accordance with the dispatch schedule
submitted by the market operator, taking into
account outstanding bilateral contracts

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RA 9136 – EPIRA LAW
Background and Legal Basis
Related Provisions - Transmission
Section 21, RA 9136 – Transco privatization
• The buyer/concessionaire shall be responsible
for the improvement, expansion, operation
and/or maintenance of its transmission assets
and the operation of any related business.

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RA 9136 – EPIRA LAW
Background and Legal Basis
Related Provisions - Distribution
Section 22, RA 9136
• The distribution of electricity to end-users shall
be a regulated common carrier business
requiring a national franchise. Distribution of
electric power to all end-users may be
undertaken by private DU’s, cooperatives, LGU’s
presently undertaking this function and other
duly authorized entities, subject to regulation by
the ERC.

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RA 9136 – EPIRA LAW
Background and Legal Basis
Related Provisions - Distribution
Section 23, RA 9136
• A distribution utility shall have the obligation to
provide distribution services and connections to
its system for any end-user within its franchise
area consistent with the distribution code.
• Any distribution utility shall be entitled to impose
and collect distribution wheeling charges and
connection fees from such end-users as
approved by the ERC.

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HOW DO WESM RATES AFFECT ELECTRICITY BILLS?
EPIRA Section 23:
A DU shall have the obligation to
supply electricity in the least cost
manner to its captive market,
subject to the collection of retail
rate duly approved by the ERC.

WESM rates are part of

generation charge billed by
distribution utilities to their
customers.
Spot quantity settled
based on WESM Spot
Price
Total
Energy, Bilateral Contract
kWh Quantity (BCQ) settled
based on Contract Price

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HOW DO WESM RATES AFFECT ELECTRICITY BILLS?
Bill Component Sub- Percenta
Total ge
Generation xxx.xx xx.x%
Transmission xx.xx x.x%
Distribution xxx.xx xx.x%
Blended Rate
Subsidies x.xx x.x% (Power Supply Agreement &
Government xx.xx xx.x% WESM)
Taxes
Universal x.xx x.x%
Charges
Other Charges x.xx x.x%
Total xxx.xx 100.0%

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UNDERSTANDING YOUR ELECTRIC BILL

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FUNCTIONAL STRUCTURE
Oversight Regulation

Department Energy Regulatory Philippine

of Energy Commission (ERC) Competition
(DOE) Commission (PCC)

Governance Market Operations System Operations

Philippine Electricity Independent Electricity Market National Grid

Market Corp. (PEMC) Operator of the Philippines, Inc. Corporation of the
(IEMOP) Philippines

Market Participants Services

GenCos Customers Network Service Providers Metering Service

Providers

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