ENERGY

LAW

OIL DEREGULATION
1. Barriers to entry nationality requirement (60/40)
2. Price setting

Petron-owned by POCC

See definition, activities of Oil Deregulation Act

Purpose of Oil deregulation:
Liberalization more competition reasonable price (lower)

RA 8479: AN ACT DEREGULATING THE DOWNSTREAM OIL
INDUSTRY AND FOR OTHER PURPOSES
1. Difficulty in administering
Downstream





Participants

Activities
2. Anti-Competition/Trust
a. Cartelization (collusion)
b. Predatory pricing lower price

HW:
Authority/Jurisdiction of DOE DOJ Body Task Force
Transitory Provisions/phase (recent news, OPSF)
IPO requirement
Biodiesel
Bioethanol

High voltage: 250 (Plant)
Low voltage: 138 (Transmission)

Household: 220

Symbiotic relationship: economy and electricity

CA 120: PUBLIC SERVICES ACT
Road map to provide public services to the Philippines

NPC (original mandate is for Hydroelectric power)

Island grid

Power Gen



HV lines



LV lines for distribution

SPUG small power utilities grid
NPC biggest corporation in the country

BOT Law
P8/Kw hr present (before it was fixed at a certain price)

Pass-on and pass thru charges ERB mandates private generator
operators

ERC mandate- protect the consumers

NPC started buying electricity

Long-term contracts (29 years)

Contingent liabilities

Assumptions proved to be wrong

BOT = risk allocation (identify risks)


Take or pay contract = resale value = exit

3 Baskets of Risk
1. Legal/regulatory
2. Commercial
3. Financial
4. technical

IPP NPC End-user
P85

P50

- Assumed whatever the risks

Before EPIRA, vertically integrated industry (Government owns
everything)

Generation = NPC, NPC IPPs (Meralco)
Transmission = NPC (high voltage)
Distribution = Private Dus Electric Cooperations (low voltage)

Full deregulation = ERB has control

EPIRA Objectives
1. Restructuring
2. Privatization

End goal = open access and retail competition

Open access distribution system/writes (low voltage)

Transmission Transco
(including franchise)
(Q: How do you transfer a franchise?)

Generation assets (including IPP contracts and all NPC debt
PSALM)

IPPA administrator unique in the Philippines, own output and can
sell at whatever price it chooses, trades it to WESM

National Grid Corporation of the Philippines (NGCP)
(Private) operation and maintenance
State Grid of China
Monte Oro SM (Sy)

VAT zero-rated

Contestable vs. Captive customers
(1M Megawatt)

BATILEC II
- largest electric cooperative

1. WESM
Certificate of Public Convenience
Transition blues
Regulated entity Regulatory power

Gross pool all electricity

Take or Pay
Take and Pay
Standards
Pay what you get
Technical aspects

BONUS QUESTION FINALS: Sustainability readings