Advancing inclusive energy regulation

SINCE BEING ESTABLISHED in June 2001, under the Electric Power Industry Reform Act (EPIRA), the Philippine Energy Regulatory Commission's (ERC) value to the Filipino people has been inestimable, guiding the nation's electricity landscape toward competition, affordability, and sustainability, way before it was common practice.

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For over 24 years, it has implemented landmark reforms and has authored crucial rulings governing today's energy market while leading the digital transition at the energy sector.

Before the passing of EPIRA, the energy sector in the Philippines was operated and maintained by the Philippine government through the National Power Corp., which practically controlled the whole of the industry. From this, EPIRA divided the electric power industry into four, namely, generation, transmission, distribution, and supply. This led to the founding of three key institutions: the quasi-judicial ERC, the National Transmission Corp. (TransCo), and the Wholesale Electricity Spot Market (WESM).

Under the EPIRA, power generation was opened to competition and made accessible to the energy giants supplying power to Filipinos today. The transmission and distribution of electricity remained regulated activities, falling under the rate-setting authority of the ERC.

Furthermore, supplying electricity to the contestable market was no longer classified as a public utility function, which meant that suppliers were not required to obtain a national franchise. In a sense, the founding of the ERC in itself laid the foundation for the competitive and highly sustainable energy sector in the present.

Once established as a regulatory body, the ERC began to promote competition, encourage market development, ensure customer choice, and penalize abuse of market power. One of the first regulatory acts carried out by the commission was to unbundle power rates and promulgate grid and distribution codes. These efforts created a more transparent and accountable energy sector by allowing consumers to see the true cost of electricity generation, transmission, and distribution.