2nd District, Oriental Mindoro THE ROLE OF CONGRESS IN THE PURSUIT AND PROMOTION OF A MORE RESPONSIVE REGULATORY ENVIRONMENT IN THE PHILIPPINES’ ENERGY DEVELOPMENT Hon. Reynaldo V. Umali 2nd District, Oriental Mindoro EPDP Conference January 13, 2016

CONGRESS AND REGULATORY FRAMEWORK Helping ERC to become a more responsive regulatory body. 1st– Identify the vital issues to be tackled in Congress. 2nd– Agree on policy changes instituted through executive action or remedial legislation.

EPIRA (R.A. 9136) Dismantled NAPOCOR’s sole responsibility in generation and transmission Opened these sectors to private sector Aimed to attract the financial strength and managerial expertise of businesses Relieve the government of massive loan obligations incurred by NAPOCOR.

POLICY DECLARATIONS 2 & 3 OF EPIRA To ensure the quality, reliability, security and affordability of the supply of electric power; 3 To ensure transparent and reasonable prices of electricity and enhance the competitiveness of Philippine products in the global market;

EPIRA’S PROMISE OF LOWER ELECTRICITY RATES The promise is still unfulfilled after 14 years. We need to move FORWARD.

JOINT CONGRESSIONAL POWER COMMISSION Established through Sec. 62 of EPIRA Has 9 important fuctions

FUNCTIONS OF JCPC e Review and evaluate the performance of the industry participants in relation to the objectives and time lines set forth in EPIRA; h Determine inherent weaknesses in the law and recommend necessary remedial legislation or executive measures

JCPC AND HJR 21 Saved the government 6 – 12 billion pesos for the rental or purchase of 300MW gensets to address the 2015 summer power crisis.

EPIRA: AMEND OR REPEAL? EPIRA Amendments through HB 4479 Met strong opposition from different sectors The need to address the environmental concerns in energy sector.

CONGRESS AND A MORE RESPONSIVE REGULATORY ENVIRONMENT The WESM rules and other statutes should be considered for review; The WESM “Must Offer Rule” should be made “Mandatory;”

CONGRESS AND A MORE RESPONSIVE REGULATORY ENVIRONMENT Power supply and demand imbalance in the WESM may be addressed through: Stratified additional capacity planning, breaking up the projected additional generation capacity requirement into baseload, mid-merit and peaking on the basis of the historical load duration curve or load profile;

CONGRESS AND A MORE RESPONSIVE REGULATORY ENVIRONMENT The DOE should expedite the issuance and implementation of the Demand Aggregation and Supply Auctioning Policy (DASAP) mandating distribution utilities to procure their uncontracted baseload requirements, and at least 50% of their intermediate and peaking requirements; The ERC should expedite the issuance and implementation of the Rules Governing the Execution, Review, and Evaluation of Power Supply Agreements providing, among others, “benchmark pricing” for each energy technology and an obligation to provide Replacement Capacity in case of unscheduled/forced outage; and, Establishment of a Reserve Capacity Market;

FINAL THOUGHTS ERC needs to educate consumers Integrate Information Technology in operations to connect various offices The importance of Information, Education, and Communication.

THANK YOU!