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Makati Business Club also opposes Epira amendment

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Makati Business Club also opposes Epira amendment

/ 05:40 PM June 03, 2014

SCREENGRAB from www.mbc.com.ph

MANILA, Philippines—The Makati Business Club on Tuesday opposed proposals to amend the Electric Power Industry Reform Act (Epira) or Republic Act 9136, saying that proper implementation is what is needed.

“We support the view of our colleagues in the other business associations that rather than opening up Epira now for amendments or changes, what is needed is the full implementation of its provisions as written in the law,” the MBC said in a position paper.

The MBC believes that opening up Epira for review “will reinforce concerns about an unstable and unreliable regulatory framework, and these concerns may cause the deferment or cancellation of pending investments in the power sector.”

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“As we recognize that providing adequate and stable power supply is critical for our national interests, it is imperative that we maintain an environment that is consistent with the need to generate investments in the electric power industry to meet the current and future power requirements of the Philippines,” the MBC said further.

Changes in the regulatory framework that can be made to further promote and protect long-term consumer interests would encourage a more competitive market without amending EPIRA.

The MBC suggested that the DOE should avoid the delay of the establishment of a reserve market; execute much delayed transfer of functions, assets and liabilities of the market operator to an independent market operator, which should have occurred within one year of the establishment of Wholesale Electricity Spot Market; complete the implementation of open access by June 30 next year to allow end-users with loads of 750kw and above to source their own power; further accelerate open access through allowing end-users with loads of 500 kw and above to source their own power by June 30, 2016; amend Automatic Generation Rate Adjustment rules applicable to distribution utility generation charges; establish policy on the treatment of wholesale aggregators executing Power Supply Agreements with distribution utilities; reference the 4% threshold level of DOE circular DC2013-12-0029 to offered capacity, in this connection, the “must offer rule” should be maintained; and diligently monitor anti-competitive behavior and take action accordingly.

The MBC also suggested that the privatization of the remaining government assets and contracts should be accelerated by the Power Sector Assets and Liabilities Management Corporation.

It also urged the system operator of the National Grid Corporation of the Philippines to publish on a regular basis the annual planned outages of power plants in order for distribution utilities to plan ahead.

“A lack of consistency in policy and implementation will discourage future investment in power generation, exacerbating projected power shortages. While the Philippines has enjoyed robust economic growth in the recent past, it is imperative that we improve our competitiveness through stable policy direction and by creating an environment that is conducive to investment,” the MBC said.

Last week, foreign and local business groups composed of the American Chamber of Commerce of the Philippines (AmCham), European Chamber of Commerce of the Philippines (ECCP), Japanese Chamber of Commerce and Industry of the Philippines Inc. (JCCIPI), Korean Chamber of Commerce of the Philippines (KCCP), Employers’ Confederation of the Philippines (Ecop), Financial Executives Institute of the Philippines (Finex), and the Management Association of the Philippines (MAP), released a position paper  rejecting calls to amend Epira.

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