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Bacolod City, Philippines Thursday, July 7, 2016
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Benitez bill seeks scrutiny
of power supply contracts

Rep. Alfredo “Albee” Benitez (Neg. Occ., 3 rd District) has filed a bill seeking to put power supply contracts under closer scrutiny, which is expected to decrease electricity rates.

House Bill No. 84 will require the Energy Regulatory Commission to conduct a transparent bidding process for power supply, amending Section 45, B of Republic Act No. 9136, or the Electric Power Industry Reform Act of 2001.

The bill mandates ERC to conduct transparent and competitive selection process in power supply contracts between distribution utilities and generation companies.

EPRIA was passed to promote transparent and reasonable prices of electricity in a regime of free and fare competition, Benitez said.

“The amendment to EPIRA will provide for a closer scrutiny of power contracts and will make the Department of Energy accountable for questionable transactions between the distribution and generation sectors,” he said.

Although the passage of EPIRA generated hopes for a more accessible power supply in all regions and affordable power rates he said, 13 years after its approval has not brought down the rates through the cultivation of market competition.

Even with the introduction of WESM, distribution utilities are still allowed to enter into bilateral supply contracts, he said.

He quoted a 2013 USAID study report stating that majority of the energy sales in WESM are not spot sales and, instead, some 90 percent of the power purchases are bilateral agreements.

“Possible collusion seems to occur when some companies that have interests in both distribution and generation utility become participants in bilateral agreement, negating the intention of EPIRA,” he also said.*KBC




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