JCPC, DOE approve Power Act’s IRR

The Joint Congressional Power Commission (JCPC) and the Department of Energy (DOE) signed yesterday the implementing rules and regulations (IRR) for Republic Act 9136 or the Electric Power Industry Reform Act of 2001.

Even after signing the IRR, however, some members of JCPC are thinking of introducing some amendments to clear-up certain "ambiguities" in the law.

JCPC co-chairman Sen. Renato Cayetano, in a press statement, said that while drafting the IRR, majority of the 14-members of JCPC, realized there are certain vague provisions in the law that may lead to future misinterpretation.

"There is a consensus among the JCPC members to file amendments to revise certain provisions in the law, either by joint resolutions or separate bills after we detected many ambiguities in the Electric Power Industry Reform Act," Cayetano said, showing support to some business groups’ appeal for the JCPC and the Energy Regulatory Commission (ERC) to take a second look and amend some of the provisions of the power bill.

Some provisions concerning the industrial/commercial sector have been the object of criticisms. Among these provisions are: Imposition of universal charge on all electricity end-users, retail competition and open access, Napocor’s disposal of sub-transmission assets, reliability of distribution utilities, distribution of wheeling charges and cross subsidies.

According to Cayetano, the IRR will usher in major structural reforms for the power industry and the privatization of the state-owned National Power Corp. (Napocor).

EIRA seeks to restructure the power industry by dividing it into four different sectors – generation, transmission, distribution and supply – to encourage competition and promote efficiency. It was passed into law on June 8, 2001.

Cayetano said the IRR provides for a socialized pricing mechanism called the lifeline rate for marginalized end-users as provided for in the power restructuring law. This special rate is exempted from cross subsidy removal under the Act for a 10-7 year period.

"It is now mandated by law that families living in poor and marginalized areas will be charged by distribution utilities with rates that are lower than what is normal," Cayetano pointed out.

The JCPC together with the DOE and its attached agencies have been holding executive sessions to come out with a consolidated IRR.

The DOE as mandated by the law prepared a draft IRR which went through a series of national public consultations with different stakeholders, and submitted it to the JCPC last Nov. 14, 2001.

One of the highlights of the approved IRR includes the exemption of households, hospitals, and other medical facilities which have their own power generating facilities from the imposition of the universal levy. Industries or firms with self-generating plants will also be exempted from the universal charge for four years from its imposition.

In a bid to further reduce the electricity rates, the IRR also grants zero value-added tax (VAT) on the generated power through all stages of sale until it reaches the end-user.

The IRR will also honor Napocor’s power supply contracts with the distribution utilities and electric cooperatives. These power supply contracts to be known as transition supply contracts (TSCs) duly negotiated with the other party will be applied before the Energy Regulatory Commission (ERC).