IRR signed for marginalized power consumers’ subsidy

MANILA, Philippines — The Energy Regulatory Commission (ERC), Department of Energy (DOE) and Department of Social Welfare and Development (DSWD) have signed the implementing rules and regulations (IRR) to provide subsidy to marginalized electricity consumers.

The IRR was signed pursuant to Republic Act 11552, or An Act Extending and Enhancing the Implementation of the Lifeline Rate, Amending for the Purpose Section 73 of RA 9136, or the Electric Power Industry Reform Act (EPIRA) of 2001.

From a period of 20 years, this was extended to 50 years, allowing the country’s marginalized electricity end-users to continue benefiting from the subsidy provided under the lifeline program.

This will ensure the fair and equitable implementation of the lifeline subsidy among qualified marginalized electricity end-users, according to the ERC.

In a statement, ERC chair and chief executive officer Monalisa Dimalanta commended the inter-agency team that crafted the IRR.

“The IRR is the product of effective inter-agency collaboration to deliver better public service. We are looking forward to its successful implementation,” Dimalanta said.

Energy Secretary Raphael Lotilla recalled the principles behind the provision on lifeline rate subsidy under RA 9136.

“The lifeline rate program in the Philippines is one of the best designed lifeline rate programs in the world; ours is better targeted,” Lotilla said.

As mandated by law, the ERC, DOE and DSWD, in consultation with the Philippine Statistics Authority (PSA) and other public and private stakeholders, with the approval of the Joint Congressional Energy Commission, shall issue, adopt and promulgate the rules and regulations to implement the provisions of RA 11552.

Based on ERC records, the lifeline program provided an average monthly subsidy of P541 million to almost six million marginalized electricity end-users for the first semester of this year.

The actual discounts to end-users will depend on the lifeline program per distribution utility approved by the ERC.

The DOE is tasked to formulate and promulgate policy guidelines deemed necessary to ensure that the law and its IRR are being lawfully implemented.

The DSWD is tasked to provide the list of qualified household-beneficiaries nationwide using a standard targeting system to ensure a uniform and objective procedure of identifying potential beneficiaries.

It is also tasked to submit annually a list of qualified household-beneficiaries under the Pantawid Pamilyang Pilipino Program or 4Ps Act to the DOE and ERC.

“The DSWD commits to assist in the implementation of the rules and regulations and identify qualified beneficiaries,” DSWD Undersecretary for special concerns Vilma Cabrera said.

The ERC is entrusted to determine the new lifeline level, provide criteria for qualifications of a marginalized end-user to avail oneself of lifeline discount rates and monitor compliance to the implementation of the program, among others.

Napocor budget

Meanwhile, state-run National Power Corp. (Napocor) has asked Congress to augment its 2023 budget to ensure that it can sustain the operations of its 278 small power utilities group (SPUG) plants nationwide.

In a letter addressed to the House committee on appropriations chaired by Ako Bicol party-list Rep. Elizaldy Co and vice chaired by Marikina City 2nd District Rep. Stella Quimbo, Napocor emphasized the need for its supplemental budget to be included in the General Appropriations Act (GAA) for 2023 or that additional funding sources to cover the augmentation be approved this year.

“Inclusion of our proposed special provisions in the GAA would allow our board to augment our budget if possible sources of funds become available without going back to Congress,” Napocor president and CEO Fernando Martin Roxas said.

In pushing for its request, Napocor cited the volatility of fuel prices, which are currently priced twice as much as the initially available funds.

Fuel accounts for almost 70 percent of the agency’s operational costs for both its SPUG plants and new power provider subsidies (NPPs).

Roxas said other contingency measures being considered are credit lines from the Land Bank of the Philippines, immediate approval of tariff applications before the ERC and reimbursements for the advances it made in the maintenance of the Bataan Nuclear Power Plant from 2011 to 2023 in the amount of P404 million.

As mandated by the EPIRA, Napocor powers up far-flung islands and communities not connected to the main grid.

Along with NPPs/qualified third parties and with its 278 power plants and power barges and as operators of the transmission systems of six provinces, Napocor provides electricity to around 1.3 million households in the countryside.

EPIRA amendments

With the advent of renewable sources of energy, it is about time that Congress introduce amendments to the 21-year-old EPIRA, according to a senior administration lawmaker.

For Camarines Sur 2nd District Rep. LRay Villafuerte, President Marcos was right when he advised Bacolod City Mayor Albee Benitez to seek the advice of the ERC about the prospects of entering into a joint venture with solar power generators so that power rates could be reduced.

Villafuerte said such a move is necessary to significantly “slash” high electricity rates and attract foreign and local investments in the energy sector.

One particular amendment he sought is the policy that grants distribution utilities (DUs) the “exclusive right to operate in their respective franchise areas,” which only resulted in the monopoly of some supply companies, to the detriment of consumers.

“The 1987 Constitution prohibits any monopoly or exclusive right in franchises,” Villafuerte said.

“The EPIRA of 2001 (RA 9136) should thus be amended to make this constitutional prohibition clear, so that competing DUs could be allowed to do business in areas currently serviced solely by franchisees,” he added.

This way, consumers will have the power of choice as to which service provider to get, based on which one offers more stable, better and cheaper services, according to the lawmaker.

DUs are corporations, electric cooperatives, state-run utilities or local government units that have exclusive franchises to operate and maintain electricity distribution systems.

The proposal to make amendments to the EPIRA was included on the original Legislative-Executive Development Advisory Council (LEDAC) list, but failed to make it to the 30 priority measures.

The measure, however, remains in the LEDAC-endorsed bills for passage by Congress.

The EPIRA mandates the ERC to promote competition, encourage market development, ensure consumer choice protection and penalize as well any form of abuse of market power providers in the electricity industry.

Villafuerte said monopolies are an anachronism in the digital age.

“We need to get rid of these monopolistic structures, particularly in the power distribution level, that have hindered true competition and prevented consumers from gaining access to industry players that offer better services and cheaper electricity,” he added. – Delon Porcalla