By John Victor D. Ordoñez, Reporter

THE Department of Energy (DoE) on Thursday urged senators to amend the Energy Regulatory Commission (ERC) charter to allow price increases without regulatory approval as long as these fall within a set benchmark or bracket.

This would allow the regulator to do away with the cumbersome approval process that power distributors have complained about, Energy Undersecretary Sharon S. Garin told a Senate hearing looking at changes to the 23-year-old Electric Power Industry Reform Act (EPIRA).

“If the distribution utility applies for this (price increase) and it is within the benchmark and they can prove that they followed a fair, transparent procurement process, then it should not be a full-blown process but just a summary procedure that will be shorter,” she said.

The energy official said the move would also free the ERC from its time-consuming function as a quasi-judicial court when hearing price petitions.

At the hearing, Senator Sherwin T. Gatchalian pushed to empower the ERC to speed up the approval of power supply deals amid constant blackouts in the country.

“The resetting of rates is one of the most important activities of the Energy Regulatory Commission because it determines the appropriate rates entities should charge,” he said.

Ms. Garin added that her agency is also finalizing proposals for penalties the ERC can impose in cases of economic sabotage in the power generation sector.

“We are trying to finalize how to define economic sabotage as far as energy is concerned and maximize the penalty for a fault made by industry players,” she said in mixed English and Filipino.

In his third address to Congress, President Ferdinand R. Marcos, Jr. sought a review of EPIRA to address issues hounding the energy sector, particularly high energy prices.

Energy Undersecretary Rowena Cristina L. Guevarra told senators in May that 4,000 megawatts of power might be added to the country’s power generation capacity by the end of the year.

She said some power plants that eye setting up shop this year are falling behind in the application process but are ready to start operations.

“Our goal is that people have access to electricity in a reliable manner and not in intermittent energy,” Senator Pilar Julianna S. Cayetano, who heads the energy committee, told the hearing.

“We need our regulatory bodies to be on the ball, to be able to react quickly and not three years later, not five years later,” she added.

House of Representatives bills seeking to amend EPIRA are pending with its energy committee.

The House energy panel is considering changes to the ERC charter that will speed up the approval process through benchmark rates, according to a draft bill dated Sept. 1 previously obtained by BusinessWorld.

It is also considering a new provision in the charter that requires the ERC to rule on administrative cases within 30 days.

Philippine lawmakers have committed to fast-track amendments to EPIRA, which is one of the President’s priority measures.

Analysts earlier said lawmakers should limit cross-ownership and address privatization concerns under EPIRA to boost competition.

Think tank Center for Energy Research and Policy said cited the need to reform the power procurement process and increase investment incentives to boost competition.

It has also recommended enhancing the regulatory powers of the Department of Energy and the ERC.

EPIRA restructured the electric power industry by privatizing the generation, transmission, distribution and supply of power in 2001.

Under Section 5 of the law, cross-ownership — the concentration of ownership in two or more related businesses — is only outlawed between a transmission company and any company in generation and distribution.

By John Victor D. Ordoñez, Reporter

AUSTRALIA plans to provide the Philippines more than P4 billion yearly until 2029 in official development assistance (ODA) to support mining, infrastructure, renewable energy (RE) and agriculture, as part of the country’s five-year development partnership plan with the Southeast Asian nation.

“We are talking about multiples of more than P4 billion per year of predominantly official development assistance in the Philippines to help [it] achieve good economic reforms,” Australian Ambassador to the Philippines Hae Kyong Yu told a news briefing in Makati after the launch of the program.

She said the Australian Embassy in Manila has brought in Australian mining tax experts to work with their Philippine counterparts as Congress deliberates on a measure that seeks to develop a new tax regime for the industry.

The embassy has also been encouraging players in the Australian mining industry to partner with mining companies in the Philippines on mining best practices.

Senators are set to continue floor debates on a proposal for a five-tier margin-based royalty rate system for the sector ranging from 1% to 5%, and a five-tier windfall profit tax system from 1% to 10%.

The House of Representatives approved its version of the measure in September last year.

Senate Bill No. 2826 seeks a royalty of 5% from large-scale miners inside mineral reservations based on gross output, while those outside reservations will follow the five-tier margin regime.

The government expects to generate P6.26 billion in yearly revenues from the mining tax regime, according to the Department of Finance.

The existing tax system for mining companies requires them to pay corporate income, excise, royalty, local business and real property taxes, as well as fees to indigenous communities.

President Ferdinand R. Marcos, Jr. on Wednesday urged the Senate to fast-track the measure’s approval.

Ms. Yu noted that about P3.6 billion of Australian’s planned annual funding assistance would be in the form of official development assistance.

In the past two decades, funding assistance from Australia to the Philippines has reached about P63 billion.

“We will support Philippine government agencies to implement key economic reforms, partner with the Philippines in key sectors including infrastructure, RE, telecommunications and digitization,” Australian Foreign Affairs and Trade Secretary Jan Adams said in a speech at the launch of the partnership.

Canberra will also work with Manila to improve its cash transfer and social protection programs for poor Filipinos. It will also partner with Philippine institutions to boost human capital and skill development programs to raise the employability of Philippine workers.

“These are sectors where Australia believes we have a comparative advantage… We’ll be looking to help develop your mining sector,” Ms. Yu said.

Two-way trade between the countries reached P378 billion last year, while more than 250 Australian companies employed 44,000 Filipinos.

Trade and investment between Canberra and Manila could grow by 10% this year, Luisa Rust, minister-counselor and senior trade and investment commissioner of the Australian Embassy, earlier told reporters.

“The development partnership plan builds on our countries’ close partnership, and sets out how we will pursue our shared development priorities so that together, we can shape a peaceful, stable and prosperous region,” Ms. Yu said.