Government regulators are thoroughly reviewing existing power supply contracts to amend provisions that would help lower electricity prices, especially in off-grid areas where consumers have been reeling from spiking power rates.
“We can assure our consumers that the Energy Regulatory Commission is reviewing all the power supply contracts as well as the policies that we have to lay down to bring down the rates,” Energy Secretary Raphael Perpetuo Lotilla said in an interview on Straight Talk, the online show of Daily Tribune.
He said: “We have made the policy decision not to subsidize electricity. So we cannot just tell the distributor or even our people that prices are going to drastically go down. We are still dependent on imported fuel.”
The Department of Energy, he said, is carefully studying Republic Act 9136, the Electric Power Industry Reform Act of 2001, or EPIRA, to ensure that the more than two-decades-old law can keep up with the changing energy landscape while upholding the interest of the consumers.
Energy mix
Lotilla said the EPIRA amendments can be related to the ERC’s powers and the penalties it may impose and the Philippine Competition Commission’s powers relative to the energy sector.
“It’s important to clarify where the lines of defense lie. The first line of defense is with the electric cooperative itself and therefore as consumers and members of the electric cooperative, our consumers must take an active role in the management of the electric cooperatives,” he said.
The EPIRA, passed during the time of former President Gloria Macapagal Arroyo, mandates ERC and PCC to promote competition, encourage market development, ensure consumer choice, and penalize abuse of market power in the restructured electricity industry.
The law also promotes competition by creating a level playing field, among other things, in the competitive retail electricity market.
The government has been exploring ways to lower the prices of power in the provinces, which are mostly controlled by electric cooperatives.
One of the solutions that has been on the table is the development of nuclear power, particularly the potential deployment of small modular reactors or SMRs on small islands that are not yet connected to the main grid.
Early this week, Manila Electric Co., or Meralco, the country’s largest power distributor, signified its plan to tap an American partner to jointly explore the country’s potential to develop nuclear energy as a viable power source.
Meralco chairman and chief executive officer Manuel V. Pangilinan, in an interview with reporters, said the company recently signed a non-disclosure agreement with an American firm with expertise in nuclear development.
However, Pangilinan noted that since nuclear energy requires a new technology, it would be “at least five years away from commercial production.”
Last year, Meralco sought a United States Trade and Development Agency grant to generate additional funding to bankroll a feasibility study on nuclear energy.
The government has been supportive of the exploration of nuclear power as an energy source in line with the global push to reduce fossil fuel use due to its hazardous carbon emissions.
According to Lotilla, the government would need the support of Congress to ratify a law that would help jumpstart the integration of nuclear power into the country’s energy mix.
Pending the passage of the law, the DoE and all other government agencies concerned are actively looking for possible sites where a nuclear power plant can be built, he added.