EO 474 seen to drive away investors in power sector

The Private Electric Power Operators Association (PEPOA) has described Executive Order 474 as a deterrent to investments in the power industry.

In a statement, PEPOA said the formation of an "energy superbody" will not attract new investments nor lower electricity prices.

"We are concerned over recent reports that some groups are backing the creation of this energy superbody, not knowing of the dire consequences it will inflict on the privatization of the power industry," PEPOA executive director Ranulfo Ocampo said.

PEPOA said the government should instead create a stable, regulatory environment that will attract investors and will spur the much-needed privatization of the power industry.

"This will create competition and hopefully, lower prices in the long-run without government subsidies," the PEPOA official said.

PEPOA said the creation of a superbody to be called Philippine Strategic Oil, Gas, Energy Resources and Power Infrastructure Office, (PSOGERPIO), is a reversal of the Electric Power Industry Reform Act’s (EPIRA) goal of privatizing and restructuring the power industry. 

"In fact, the EO did not even mention of anything about hastening the privatization of the power industry. As such, EO 474 is a step backwards to re-nationalization and central planning," the group said.

The proposed PSOGERPIO is to "…coordinate efforts of the Department of Energy and other departments and agencies in attracting investors; and in promoting the use of indigenous and renewable energy resources and other energy sources to reduce dependence on imported energy and reduce energy cost to the consuming public."

But PEPOA believes the creation of such a body is illegal and not within the mandate set by the EPIRA.

The groups said this is merely a duplication of the functions of the Department of Energy (DOE).

In addition, they said the PSOGERPIO will only create problems as it will be another layer of regulation in an industry that is so complex and technical in nature.

"In fact, it will step on the regulatory powers of the Energy Regulatory Commission (ERC)," the PEPOA said.

PEPOA believes the ERC is the legal and competent body to shepherd the industry from being regulated to become an industry where market forces will be at work. The successful shift of the industry is the only way where consumers will eventually reap the benefits of a stable power supply and competitively priced power, as espoused in the EPIRA.