EPIRA & Juan Dela Cruz: Evaluating Republic Act 9136 in relation to the lives of common Filipinos

Abstract

Electric power is a basic service that is essential for the operation of household, commercial and everyday life. Electricity however contains several key features that render it prone to market power and potential market power abuse. Researchers identified the following: (1) the need for constant supply and demand of electricity, (2) costly storage and distribution of the product, (3) inelastic property of electricity as a commodity. For this reason, electricity markets are more vulnerable to market power abuse than any other energy markets such as that of gasoline. Same is the case in the Philippines, several laws and policies have been passed in efforts to regulate the electricity sector and prevent market power abuse and history of regulation of electricity traces a cycle of privatization and nationalization. It has been ten years since the enactment of the Electric Power Industry Reform Act and according to a 2008 JP Morgan Chase Survey, the Philippines has the highest electricity rate in Asia; en more to that of Japan, the world's third largest economy. This paper examines EPIRA the effects of a privatization policy on a consumer's standpoint and on aggregate social welfare.