Bill banning power distribution utilities from owning power plants filed

A bill prohibiting power distribution firms from owning power generation companies and retail electricity suppliers has been filed by opposition lawmakers in the House of Representatives.

House Deputy Minority Leader France Castro of ACT Teachers party-list, House Assistant Minority Leader Arlene Brosas of Gabriela party-list and Kabataan party-list made the proposal under House Bill 8079, saying the said prohibition will address a loophole in the 20-year old Electric Power Industry Reform Act which allows such “cross ownership” of power distribution firms that also own power generation companies.

Castro noted that the power distribution utilities’ ownership of power plants only ensure they get huge profits with simultaneous power plant shutdowns.

“What they do is they lower the power supply with forced outages, so the power distribution utility will be forced to buy power at a higher rate in the spot market, resulting in higher power rates which burden the consumers,” Castro said in a statement.

"Given that the generation cost of electricity is passed on by the distribution utility to the consumers, the higher the generation price, the higher the rates the consumers will pay,” the lawmakers added in their explanatory note.

While EPIRA’s (Electric Power Industry Reform Act) goal was to foster competition and competitive mechanisms to give consumers the power to choose their power suppliers that offer the least cost by allowing power distribution firms to own power generation companies, Castro said this has not been the case on the ground.

“It is not difficult to guess which generation companies these retail electricity suppliers prefer. And it has also been the convenient excuse that competitive selection process or CSP prevents the a distribution utility from unduly awarding power supply agreements (PSAs) to the generation companies it owns or has business ties with when CSP’s can be rigged,” Castro said.

“Never underestimate a monopoly’s power to abuse," Castro added.

A similar bill was first filed by Bayan Muna party-list lawmakers in the 18th Congress.—RF, GMA Integrated News