The Department of Energy (DOE) urged the House of Representatives on Thursday (Sept.3) to review the Electric Power Industry Reform Act (EPIRA) and find a way to protect the consumers from “unseen pass-on charges.”
(PCOO / MANILA BULLETIN)
Energy Undersecretary Felix William Fuentebella made the recommendation during the House Committee on Climate Change’s virtual meeting on the current status of Philippine energy. The hearings seek to “future-proof” the energy market amid the COVID-19 crisis
"The pass-on charges should be fully disclosed. That was not present in the EPIRA, but I think it should be a minimum requirement that is why it is now placed in a Department Circular by the Department of Energy,” he told the panel chaired by Bohol 1st District Rep. Edgar Chatto.
He was referring to the DOE’s Department Circular 2018-02-0003, which adopts and prescribes the policy for the competitive selection process in the procurement by the distribution utilities of a power supply agreement for the captive market.
Fuentebella, a former Camarines Sur representative, said the competitive selection process (CSP) policy, signed by DOE Secretary Alfonso Cusi clearly states that all bids submitted by the generation companies (GenCos) should itemize pass on-costs.
“It provides that all pass-on charges should be part of the bid by all those participating in the competitive selection process. When we are faced with a bid, for example for Metro Manila, for Meralco, all bidders are required to disclose what are these pass-on charges so that they cannot be hidden…so that is (a) very important significant step taken by the DOE in addressing the prices,” Fuentebella said.
"The other aspect is the terms of reference emanating from the buyer, that is not in the EPIRA because we have proposals from the suppliers, the terms of reference be written by them through unsolicited proposals, and magkakaroon ng price matching (there will price matching). I-match po ang presyo kaya lang ang disenyo galing na sa supplier so 'yung mga area na baka ma-interpret na hindi malinaw (The price will be matched, however, the design will come from the supplier, so there are areas that cannot be interpreted clearly. These are the things that can be looked into so that it can be fortified,” he added.
It was Kalinga partylist Rep. Irene Gay Saulog who asked Fuentebella if there is a need for Congress to enact legislation to ensure that no unnecessary charges will be billed to the consumers.
“It was mentioned that the removal of the automatic pass-through and carve-out clause ultimately benefited end consumers. I agree this should be observed and become a standard (provision) in the future power contracts. I’d like to ask what can be done to ensure that this becomes the norm. Does the Congress have to enact legislation or do we just urge the government regulators to implement this?,“ Saulog asked.
Negros Oriental 1st District Rep. Jocelyn Limkaichong also asked the DOE to step up and implement other measures that would “prevent the practice of passing the risk to end users or consumers who are ill-equipped to manage such risks.”