Electric Power Industry

Reform Act (R.A. 9136)

13 March 2014

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EPIRA
Generation
Policy
Secure COC from ERC, as
Total electrification
Transparent and reasonable prices well as health, safety and
environmental clearances
Quality and reliability
before operation
Promote renewable energy sources
Privatization of assets and liabilities ofNot
NPC
considered a public
utility operation
Scope
Provide framework for restructuring of Not required to secure
a national franchise
Electric Power Industry
Organization
Prices charged by
generation companies for
A
supply of electricity is not
regulated
Sales shall be value
added tax zero-rated
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EPIRA (Transmission Sector)

Transmission vs.
Subtransmission

National Transmission
Corporation (TRANSCO)

Luzon: >230kV
Visayas and Isolated
distribution systems: > 69kV
Mindanao: > 138kV
Only TRANSCO is allowed to
own and manage transmission
facilities
Only PSALM, TRANSCO, and
connected distribution utilities
are allowed to own and
manage subtransmission
facilities
Transmission of electric
power shall be regulated,
subject to the ratemaking
powers of the ERC

System operator of subtransmission

systems nationwide
Wholly owned by PSALM
Ensure reliability and integrity of
nationwide electric grid in accordance
with performance standards set in the
Grid Code
Improve and expand transmission
facilities
Transmission Development Plan for
integration with PDP and PEP
Able to exercise all powers of a
corporation
May do business to maximize costs, so
long as part of the income contributes to
reducing transmission wheeling costs
Concession contracts have a period of
25 years, which may be renewed for a
maximum of another 25 years

*Generation companies may

own/operate dedicated point
to point limited transmission

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EPIRA (Distribution Sector)

Distribution Sector
Distribution of electricity
shall be a regulated common
carrier business requiring a
national franchise.
DUs are obligated to provide
distribution services and
connections to its system for
any end-user within its
franchise area consistent with
the distribution code
Entitled to impose and collect
distribution wheeling charges
and
connection fees from endusers as approved by the ERC
Submit statement of
compliance to Distribution
Code to ERC
May do business to maximize
costs, so long as part of the
income contributes to reducing

De-monopolization: Holdings of persons

in a distribution utility shall not exceed
25% of the voting shares of a stock
unless DU is listed in PSE

Supply Sector
All suppliers of electricity to the
contestable market shall require a
license from the ERC
Not a public utility operation, shall not
be required to secure a national
franchise
Prices charged to suppliers to the
market shall not be subject to regulation
by the ERC
Suppliers charge should be segregated
and identified in the suppliers billings

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EPIRA
Wholesale Electricity
Spot Market
DOE and Electric power
industry participants formulate
mechanism for determining
price.
Establishes merit order
dispatch instructions per period
NEA may act as guarantor for
purchases by any electric
cooperative or small DU
Cost of administering WESM by
market operator shall be
charged to the members
NPC Stranded Debt and
Contract Costs Recovery
Duration: 15-25 years

DU Stranded Contract Cost Recovery

Duration: 15-25 years
Shall be subject to approval of the ERC
Universal Charge
Recovery of stranded debts and
stranded contract costs
Missionary electrification
Equalization of taxes and royalties
applied to indigenous sources of energy
Environmental charge of P0.0025/kWh
for watershed rehabilitation and
management
Account for all cross-subsidies

Unbundled rates and functions

Transparency
Inter-class subsidies removed from both
the distribution retail wheeling and
suppliers charges
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EPIRA
Functions of DOE

Functions of ERC

Develop and update Philippine

Energy Plan on September 15
every year
Develop Power Development
Program
Coordinate with ERC, NPC, NEA
and PIA on informing the public
Establish WESM with
participants and jointly
Anti-competitive
formulate
behaviorthe governing rules
No company can own, operate
or control more than 30% of the
installed generating capacity of
a grid and/or twenty-five
percent 25% of the national
installed generating capacity
TRANSCO, or any of its
stockholders or officials or any
of their relatives within the
fourth civil degree of
consanguinity, shall not hold

Enforce the EPIRA, Grid Code, Distribution

Code, and rules of WESM investigative
and quasi-judicial body
Determine levels of cross-subsidies
Methodology for transmission and
distribution wheeling rates and retail rates
for captive market of distribution utilities
Penalize abuse of market power,
cartelization, and anti-competitive
behavior
*Generation companies and DUs not
publicly listed required to offer at least
15% of their common shares to the public
The ERC shall have the original and
exclusive jurisdiction over all cases
contesting rates,
fees, fines and penalties involving disputes
between and among participants or
players in the energy sector
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EPIRA
NPC Privatization

Promotion of Rural Electrification

All assets of NPC except those

owned by SPUG shall be
privatized
The participation by Filipino
citizens and corporations in the
purchase of NPC assets shall be
PSALM
Corporation
encouraged
Manage the orderly sale,
disposition, and privatization of
NPC assets and liquidate NPC
stranded debt and stranded
contract costs

NEA to prepare electric cooperatives in

operating in an environment of open
access and retail wheeling
Provision of electric service in remote
and unviable villages that the franchised
utility is unable to service for any reason
shall be opened to other qualified third
Power Commission
parties
Set the guidelines and overall framework
to monitor and ensure the proper
implementation of this Act
Submit periodic reports to the President of
the Philippines and Congress
Determine inherent weaknesses in the law
and recommend necessary remedial
legislation or
Mandated Rate Reduction
measures
executive
Upon the effectivity of this Act, residential
end-users shall be granted a rate reduction
from NPC rates of thirty centavos per
kilowatt-hour (P0.30/kWh)

Missionary Electrification
NPC through the SPUG shall
be responsible for providing
power generation in areas that
are not connected to the
transmission system

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Implementing Rules and Regulations

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