ENERGY LAW OIL DEREGULATION 1. Barriers to entry nationality requirement (60/40) 2. Price setting Petronowned 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. AntiCompetition/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) Passon and pass thru charges ERB mandates private generator operators ERC mandate protect the consumers NPC started buying electricity Longterm contracts (29 years) Contingent liabilities Assumptions proved to be wrong BOT = risk allocation (identify risks)
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
- 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 Technical aspects
