Press Release
August 26, 2018

Gatchalian: Energy reforms needed to pacify rising consumer discontent

Senator Win Gatchalian is calling for the swift implementation of energy sector reforms amid growing consumer uproar over high electricity rates in the country.

Gatchalian, chairman of the Senate Committee on Energy, made the call in response to a recent Pulse Asia Survey poll which revealed that 60 percent of Filipinos were dissatisfied with current electricity prices.

Metro Manila recorded the highest dissatisfaction rate, with 84 percent expressing their discontent, according to the survey firm.

"The people need immediate respite from all these back-breaking commodity price increases, especially when it comes to their monthly electricity bills. The government must act quickly to institute pro-consumer reforms that will produce energy savings for Filipino households," Gatchalian said.

The senator pointed to three primary reasons why electricity rates in the country are some of the highest across the region: bureaucratic inefficiencies that drives away potential investors; the lack of competition and transparency in power supply contracting; and the rising stranded contract costs and stranded debt left behind by the National Power Corporation (Napocor).

To solve these issues, Gatchalian urged his colleagues in both chambers of Congress to expedite the passage of three energy-related measures which could save consumers as much as ₱1.85 per kilowatt hour if they are enacted into law, thus resulting in overall savings of ₱370 per month and ₱4,440 per year for a household consuming 200 kWh per month.

The first measure, the Energy Virtual One Stop Shop (EVOSS) Act of 2017 (Senate Bill No. 1439), seeks to cut pervasive red tape in the permitting process of new power generation projects. EVOSS now remains pending in the House of Representatives after the Senate approved it on third reading last year.

Meanwhile, the Murang Kuryente Act, a measure based on a bill authored by Senate President Pro Tempore Ralph Recto, proposes to use the ₱207-billion Malampaya Fund to pay the stranded contract costs and stranded debt of Napocor.

Gatchalian explained that since these obligations are passed on to consumers through the universal charge in the monthly electric bill, applying the fund to pay these debts could save consumers more than ₱0.55 per kWh. The senator is scheduled to sponsor the measure on the Senate floor on Tuesday, August 28.

Meanwhile, Senate Bill No. 1653 or the Competitive Selection Process (CSP) Act seeks to foster transparency and competition in power supply contracting by requiring all generation contracts to undergo open bidding. Through this, Gatchalian said it would be possible to "discover the real cost of electricity in order to get the lowest price for the benefit of the consumers." The measure is currently in the period of amendments.

"I urge my colleagues in both chambers of Congress to prioritize the passage of these measures in order to provide relief to power consumers who have been burdened by exorbitantly high electricity rates for far too long," Gatchalian said.

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