EPIRA Reforms Will They Deliver Affordable and Reliable Power
- March 10, 2025
Amid ongoing concerns over high electricity costs and inefficiencies in the power sector, the Energy Regulatory Commission (ERC) is pushing for amendments to the Electric Power Industry Reform Act (EPIRA), aiming to reduce prices and resolve persistent industry challenges.
Enacted in 2001, EPIRA reorganized the energy sector into the four key areas of generation, transmission, distribution, and supply to promote fairness and improve performance. Before its implementation, the state-owned National Power Corporation (Napocor) controlled the entire industry.
The law also established the Energy Regulatory Commission (ERC) to oversee fair practices, foster market expansion, protect consumer choice, and penalize market abuses.
(Also read: DOE Says Summer Power Demand to Exceed 2024 Levels)
Why EPIRA needs a review
Because of concerns over high electricity costs discouraging foreign investment and recent power shortages, President Ferdinand Marcos Jr. has tasked Congress with reviewing EPIRA. The goal is to update outdated provisions and ensure the law aligns with the evolving needs of the energy sector.
Beyond revising the law, ERC Chairperson Monalisa C. Dimalanta stressed the urgent need to revamp the regulatory body itself. “The ERC is currently structured in the same way the ERB (Energy Regulation Board), its predecessor, was structured. The industry has evolved significantly from the pre-EPIRA structure.”
Dimalanta pointed out that, unlike the previously centralized setup under Napocor, today’s energy sector consists of a single transmission operator, around 300 generation companies, and over 140 distribution utilities. She argued that the ERC, in its current form, is ill-equipped to oversee such a complex and fragmented industry.
She said that overhauling the ERC could streamline regulatory processes, reduce inefficiencies, and enable the agency to better respond to the sector’s rapid growth. According to Dimalanta, “This will definitely improve our chances of getting more affordable prices in our power system.”
TWG backs bill to reform ERC charter
Last November 2024, a technical working group (TWG) in the House of Representatives approved a proposed bill aimed at revamping the Energy Regulatory Commission (ERC). The measure is designed to optimize the commission’s decision-making process, to make electricity more affordable.
The proposal mandates that power supply agreements (PSAs) approved by the ERC must uphold “quality, affordability, sustainability, and reliability”. The agency must decide on PSA applications within 60 days, or they will be automatically approved.
Additionally, the ERC must set fair benchmark prices that balance consumer interests with the costs of power generation, transmission, and distribution. To determine these rates, the bill calls on the ERC to factor in load density, sales composition, service costs, and delivery voltage, among other technical aspects.
Party-list Representative and TWG Head Sergio Dagooc believes that the ERC is responsible for most of the challenges in meeting EPIRA’s goals, as it regulates all sectors of the power industry
“Delays in the provision of capital expenditures and various power supply agreements result in higher electricity prices,” he noted. “We think that resolving issues in the ERC, with the delays, about 60% of our problems with the cost of electricity could be resolved.”
(Also read: Should the Philippines Phase Out Coal?)
Opposition against amendments
However, opinion columnist and Minimal Government Thinkers co-founder Bienvenido Oplas Jr. cautioned that regulation could discourage power companies from investing, expanding, and ensuring adequate supply.
“Price control is wrong,” he wrote. “At times of high demand and low supply, due to scheduled, unscheduled or extended maintenance of big power plants, oil-powered peaking plants step in to provide additional supply—but at higher prices, reflecting the higher cost of oil as a fuel, as well as the capital expenditures and maintenance of these plants. They must be properly compensated to help prevent blackouts and the need for candles.”
He also argued that enforcing price controls would discourage the construction of new peaking plants, as they risk being criticized by the ERC, the government, and the public for charging higher rates. “Yet the most expensive electricity is no electricity at all—a blackout,” he added.
Meanwhile, Energy Undersecretary Sharon S. Garin previously called on senators to revise the ERC charter to permit price adjustments without prior approval, provided they remain within a predefined range. She explained that this change would eliminate the lengthy approval process, which power distributors have long criticized.
To illustrate his point on the country’s poor energy supply, Oplas cited figures showing that Vietnam’s power generation surged by 803% from 2001 to 2023, far outpacing Indonesia’s 245% and the Philippines’ 153%. By 2006, Vietnam had already surpassed the Philippines in electricity production. He suggested that Vietnam and Indonesia may have fewer regulatory restrictions, enabling them to generate more power for their industries and growing populations.
“The main factor that affects electricity pricing is how large the supply is relative to the demand, which determines the level of supply margin and reserves,” he wrote. “Energy regulation should be kept to the minimum so that more players, more investors will come in to expand power supply and hence, increase power reserves that can bring down electricity prices both short- and long-term.”
Push for genuine reform
John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, urged Congress to pass laws that encourage investment in renewable energy to diversify the country’s power sources. With the Malampaya gas field—supplying a fifth of the nation’s electricity—set to run low by 2027, finding alternative energy sources is crucial.
Some sectors are also pushing for greater transparency in the power industry. Ibon Foundation Executive Director Sonny Africa emphasized that “a better direction for the power industry would be steady measures towards nationalization with much greater public transparency and accountability to check performance.”
Similarly, Nic Satur Jr., chief advocate officer of Partners for Affordable and Reliable Energy (PARE), highlighted that “meaningful reforms must prioritize transparency, accountability, consumer participation as an ex officio member in regulating agencies and the delivery of affordable and reliable energy.”
Satur also urged lawmakers to penalize underperforming power firms, blaming rising electricity costs on poorly managed cooperatives, stalled grid projects, and sudden plant shutdowns. He also pointed to system loss charges, how generation rates are set, and pass-through taxes as key drivers of frequent price increases.
“Congress should impose stricter and higher penalties on underperforming companies and agencies across power generation, transmission, and utility distribution,” he suggested.
Meanwhile, Oplas maintained that loosening energy regulations could be key to boosting investment and supply, making electricity more competitive. He stressed that oversight should prioritize enforcing contracts, penalizing violators, and fostering genuine competition rather than market manipulation.
Sources:
https://www.philstar.com/business/2025/01/30/2417774/energy-regulation-deregulation-part-1
https://www.philstar.com/business/2025/02/06/2419448/energy-regulation-deregulation-part-2
https://dailyguardian.com.ph/erc-pushes-epira-overhaul-to-cut-electricity-costs/
https://www.bworldonline.com/economy/2024/11/25/637143/twg-approves-draft-bill-amending-erc-charter/
