The CentRE’s Agenda for Reforms in the Power Sector

We, from various movements and sectorsunited around renewable energy, offer this Agenda for consideration of the government and other stakeholders in the power industry. We stand side-by-side with the millions of Filipinos who are electric power end-users – and millions more who do not enjoy electricity at home – in calling for change in the power sector.

This Agendais grounded on the need to address problems such as climate crisis, high prices of electricity, growing reliance on fossil fuel, weak regulation, inefficient service delivery, and disregard for consumer welfare.

We share the frustration of many electricity consumers with the outright failures and slow pace of reforms in the power industry under the Electric Power Industry Reform Act (EPIRA) of 2001 and even under the Renewable Energy Act of 2008. Yet we remain confidentthat amore incisive and organized push for reforms in the industry from a broad assembly of organizations that are advocating renewable energy and democracy can make thisadvocacy for change possible.

Finally, we believe that only a power system based on renewable energy – withemphasis on developing smart grid and off-grid systems operating through more decentralized structures – can energize our dream of social justice and equity, sustainability, and local empowerment.

It is in this context that we propose the following reforms in the power industry to ensure its just transition to renewable energy and democracy:

A. Removing barriers and providing incentives to RE’sfull development

RE capacity is building up, but share of coal in the energy mix is growing faster. The government can reverse the trend of RE’s shrinking share in the total energy mix and instead raise the RE’s share in energy generation (in MWh). This can be done by:

• Adopting a policy of 100 per cent renewable energy for all new capacity to meet energy demand today and in the future. We believe this is doable. This means that the government should no longer entertain new applications for coal supply contracts.
• Preparing decommissioning plans for coal and oil plants, starting from the oldest and highly inefficient ones. Consequently, this translates to additional RE capacity to match the retired capacity.
• A national framework and plan, therefore, on cutting down the country’s dependence on fossil fuel must be approved and carried out by the government in compliance with our international commitments.

The government must also look at how policies and incentives can play the role in mainstreaming renewable energy use. Some ways forward include:

• Providing more financing options for power developers and consumers wanting to transition to renewable energy. It can directly mobilize Government Financial Institutions (GFI) for this effort, while encouraging legislation that requires the banking system to prioritize credit to business activities that utilize RE;
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• Removing barriers such as Distribution Impact Studies (DIS) and other obstacles to full implementation of Net Energy Metering being required by distribution utilities;
• Requiring all government-owned buildings (NGAs and LGUs), including mass housing projects,to install solar panels and implement a more aggressive energy efficiency program. This initiative can be financed under the national expenditure program or through government-run funding facilities.
• The National Electrification Administration (NEA), Cooperative Development Administration (CDA) and Electric Cooperatives (EC) must be directed and then provided withadequate incentives to pursue theirelectrification program through mini-grids and micro-grid systems that utilize RE especially for geographically isolated areas. They must also be accorded priorityfor developing their RE capacities within their franchise areas.
• Incentivizing consumers and prosumers, individually and collectively, must be the prime consideration in the implementation of the Renewable Portfolio Standards (RPS), Renewable Energy Options (REO) and other policy mechanisms under the RE Law.
• DoE must undertake an audit for public transparency and full accounting of the 1-centavo per kWh “Benefits to host Community” in order to look into how this fund was tapped and utilized in the past years and in order to optimize its use for the benefit of host communities.
• Tedious requirements for Competitive Selection Process (CSP)must be waived for small power projects.

B. Democratizing the power industry through RE and sound governance

• RE practitioners must have active participation in all energy policy making bodies, especially those of the Department of Energy (DoE), National Renewable Energy Board (NREB), Power Sector Assets and Liabilities Management (PSALM), National Electrification Administration (NEA), and the National Power Corporation (NPC).
• The government must put in place an action plan that would transform rural electric cooperatives (RECs) into genuine cooperatives by ensuring that members actively participate in their management, thereby enabling RECs to become engines of meaningful change at the local level. RECs must be enabled to deliver renewable power to their consumer-owners.
• NEA’s current direction towards facilitating Private Sector Participation (PSP) in REC sector has added more problems than solutions to the development of the countryside. Rather than hand over RECs to the private sector, a redirection of NEA’s track towards greater consumer participation and awareness, greater embedded RE generation, greater access to the unconnected along with demand side management, would make RECs more effective.
•  The government can strengthen consumer participation in regulatory bodies by facilitating consumer representation at the Energy Regulatory Commission (ERC) and to avoid appointing Commissioners to the ERC with prior industry ties.
• Planning for future power must emanate from the local level with meaningful consumer participation. It must be integrated and become part of the output of Local Development Councils at the local government units. Its strategies on securing energy sources must be undertaken through multi-sectoral and participatory planning processes. The Department of Interior and Local Government (DILG) and the DoE can jointly embark on a capacity-building program for local energy planning and must reach out partnership with the LGU, non-government organizations and the academe.
• Ensure the implementation CSP in the process of contracting supply by Distribution Utilities (DUs) so that they are prevented from buying power from their affiliates in a non-competitive manner. However, CSP for small power projects must be waived to promote participation of small developers, including host communities.
• The DoE, DoH, DENR and LGUsmust require health impact studies to be undertaken on primary impact area of coal-fired power plants and on workers who are working at existing coal-fired power plants and must allow the media and the public to have access to results of health impact studies.

C. Ensuring energy efficiency

• Energy efficiency program and clear action plans must be required from DoE, other government agencies as well as the private sector. All DUs must likewise be required to formulate and implement EE programs down to the household level.
• The elements of the Local Power Development Plans must include demand-side management, and energy efficiency programs.
• Distributed generation systems should be developedall over the country to avoid the huge cost of operating and maintaining a system of a national grid.