EPIRA amendments seen to delay Napocor privatization

The House Committee on Energy has warned that recent calls to amend the Electric Power Industry Reform Act (EPIRA) may further delay the privatization of the National Power Corp. (Napocor).

Committee chairman Rep. Alipio V. Badelles said the proposed amendments may again send the wrong signal to potential investors who may view these moves as "changing the rules in the middle of the game".

Badelles said the investors may adopt a "wait-and-see" attitude should these proposals are brought to the Senate.

He said his committee will study such proposals and their impact of the privatization of Napocor’s assets. The sale of generation assets of Napocor is ongoing while the concession contract for the transmission assets is scheduled to be auctioned off by October this year.

"As far as the committee is concerned, it will carefully study the proposed amendments to the EPIRA in the light of observations that amendments at this time might further delay the privatization program of the assets of Napocor and Transco (National Transmission Corp.)," Badelles said.

These are recent reports that the Department of Energy (DOE) is taking the front seat in pursuing changes in the power industry reform law.

"This might again distort the timelines as mandated in the law, such as the introduction of a regime of free and fair competition in the generation business," he said.

It would be recalled that energy officials have welcomed Congressional initiative to amend some of the provisions of the EPIRA.

Transco president Alan T. Ortiz said as long as the objective of the move to amend the EPIRA will benefit the industry and its stakeholders, he will not object to it.

"Without reading the proposed draft, I was skeptical. But having read the proposed draft, it’s not so bad. What Sen. Enrile is trying to do is to fine-tune the wordings. I was apprehensive of the overhaul concept of the EPIRA. The senator just wants to make it consumer-friendly. In that respect, we will support the senator’s initiative," he said.

Ortiz, however, said those who are advocating the fine-tuning of the EPIRA should be able to do it at reasonable time.

"The process takes a long time, having been through the previous government, it took us seven years to get our act together. We only have five years with this administration. We have a lot to do… change the Constitution, rewrite the EPIRA, pass the value-added tax, oil deregulation," the Transco chief said.

Energy Secretary Raphael P.M. Lotilla shared the same sentiment, saying that the amendments being pushed by lawmakers are intended to ensure that the major directions of the EPIRA are met.

"I have to say that the general direction, which I see in the amendments are positive," Lotilla said.

"It’s good that what they are, in effect, saying if we need legislation in order to clarify certain basic directions that have been laid in EPIRA, then the proposed amendment will reestablish to clarify this," he added.

Lotilla said he welcomes the proposed changes in the EPIRA which aim to introduce more competition; underline strong regulatory authority; and ensure a viable power industry.

"What he (Enrile) is seeking to strengthen through the amendment are, for example, the reduction of the requirements for open access to reduce it from 70 percent sale of generating assets to 50 percent of the generating capacity, and to clarify that Transco can be privatized not only by selling the assets, but also through a concession," Lotilla said.

"Transco is effectively entering in a service contract or a maintenance and operations and financing contract with the private sector," he added.