Name: Jomari G.

Sinaban Date: 19/08/19

Subject: Teacher:

History of Electricity in the Philippines

Manila

La Electricista

La Electricista, founded in 1892, was very first electric company to provide electricity
in Manila. It built the first electric generating plant in the country, the Central Power Plant, on
Calle San Sebastian (now R. Hidalgo) in Manila City.
Meralco
Meralco was established as the Manila Electric Railroad and Light Company in 1903. It was
created to provide light and an electric railway system to Manila.
During World War II the transportation infrastructure of Meralco was destroyed and instead of
rebuilding the railway, the company focused its efforts onto its electric services.
During the 1960s a group of Filipino investors led by Eugenio Lopez Sr. bought Meralco from
the American investors. Meralco proceeded to expand during this time period, it was also during
this period that Meralco became the very first billion peso company in the Philippines.
During the 1970s the Philippine Government made it a state policy for the government to own all
major generating facilities. Meralco sold all of its generating plants to the National Power
Corporation (NPC) and, thus, electric distribution became its core business.
Power Generation
Power generation in the Philippines is not considered as a public utility operation, which means
interested parties do not need to secure a congressional franchise to operate a power generation
company. However, power generation is regulated by the Energy Regulation Commission (ERC)
who must issue a certificate of compliance to interested parties to ensure that the standards set
forth in the Electric Power Industry Reform Act of 2011 (EPIRA) are followed. The ERC is also
responsible for determining any power abuse or anti-competitive behavior. Power generation is a
value added tax zero-rated (i.e. not subject to 12% VAT) to ensure lower rates for end-users.
Electricity in the Philippines is produced from various sources such as coal, oil, natural gas,
biomass, hydroelectric, solar, wind, and geothermal sources. The allocation of electricity
production can be seen in the table below, according to data from the Department of
Energy Power Statistics. Fossil FuelsCoal, oil, and natural gas are the most abundant fossil
fuels in the Philippines.

Coal
Coal has the largest reserve and is often the cheapest fossil fuel. There is therefore a high
demand for coal around the globe. Throughout the years the demand for it has become steady
despite the growing environmental concerns. Coal has the highest contribution to the power
generation mix but the local demand for it is not limited to power generation. The Philippines
has a vast potential for coal resources. According to Energy Global, there is potentially an
approximate of 270 billion tons of coal resources.
Oil and natural gas
In June 2011, the Philippine Department of Energy (DOE) estimated a total of 27.9 billion cubic
feet of oil and a total of 53.9 trillion cubic feet of gas. The estimated total oil production in June
2011 in the Philippines was 63 million barrels.
Renewable resources
The government has approved feed-in-tariff (FIT) rates for renewable energy in 2014 for wind,
solar, hydroelectric and biomass energy at a rate lower than those asked for by renewable energy
developers. Hydroelectric, geothermal, biomass, wind power and solar plants operate in the
Philippines.
Geothermal power
Main article: Geothermal power in the Philippines

Palinpinon Geothermal Power Plant in Valencia, Negros Oriental

Geothermal power is the dominant renewable energy resource in the Philippines. According to
DOE, the Philippines is second largest geothermal power producer in the world behind
the United States of America. DOE estimates a total potential of untapped geothermal resource is
about 2,600 MW.
Hydroelectric power

Magat Power Plant

Hydropower is the second dominant renewable energy resource in the Philippines. There are
various hydropower plants spread out across the country. Large hydropower plants (more than 50
MW generating capacity) are connected directly to the main transmission grid whereas small
(10-50 MW generating capacity) and mini (101 kW to 10 MW generating capacity) hydropower
plants are connected to local distribution systems.[6]
Biomass power
The Philippines has an abundant supply of biomass resources including agricultural crop
residues, forest residues, animal wastes, agro-industrial wastes, municipal solid wastes and
aquatic biomass. The most common agricultural wastes are rice hull, bagasse, coconut shell/husk
and coconut coir.
According to DOE, based on the information from Department of Agriculture and
the Department of Environment and Natural Resources, the Philippines could produce substantial
volumes of residue which could be used as fuel.
Wind power
Main article: Wind power in the Philippines

Bangui Wind Farm in Bangui, Ilocos Norte

The Philippines being situated on the fringes of the Asia-Pacific monsoon belt, exhibits a
promising potential for wind energy. Wind power plants are the third most operated renewable
energy source in the country.
Power Transmission
Power transmission in the Philippines is a common carrier business (i.e. regulated by the
government, serves its franchise area without discrimination, responsible for any losses incurred
during delivery). It is regulated by the ERC who has rate-making powers and the final say in the
valuation of transmission assets. Pursuant to the EPIRA and the Transmission Development Plan
or TDP, maintenance and operations of the nationwide transmission system was subjected to
competitive public bidding conducted by the Power Sector Assets and Liabilities Management
(PSALM). The National Grid Corporation of the Philippines (NGCP) was the highest bidder. It
assumed control of the national transmission system from the National Transmission
Corporation (TRANSCO),[10]whom assumed the same function from the now defunct National
Power Corporation, by way of RA 9511 its congressional franchise of 25 years renewable for
another 25 years for a total of 50 years. Assuming it secures a renewal, NGCP's franchise will
end on December 1, 2058. Ownership of transmission assets such as poles, cables, land, etc. still
belong to TRANSCO. TRANSCO is also responsible for making sure that NGCP complies with
the standards set by its congressional franchise.
National Grid Corporation of the Philippines
The NGCP is a consortium of 3 corporations, namely Monte Oro Grid Resources Corporation,
Calaca High Power Corporation and the State Grid Corporation of China. As the franchise
holder, the NGCP is in charge of the operation, maintenance and improvement of the national
transmission system. The NGCP also controls the supply and demand of power by determining
the power mix through the selection of power plants to put online (i.e. to signal power plants to
produce power, as power plants will only produce power or feed their power to the transmission
grid when directed by NGCP). As a common carrier, it must provide non-discriminatory access
to its transmission system. The NGCP is subject to the standards set by the Philippine Grid Code
and the Transmission Development Plan. Below is a table listing the board of directors of NGCP
National Transmission Corporation
TRANSCO is a corporate entity wholly owned by PSALM. It is the owner of the National
Transmission System. After its restructuring according to the Transmission Development Plan,
TRANSCO transferred its concession to operate its transmission assets to NGCP. Today, it is
involved in monitoring NGCP's compliance with the standards set by the relevant laws. It is also
in charge of administering the FIT to renewable power generators.
TRANSCO is headed by a board of directors composed of 7 members. All board members are
appointed by the President of the Philippines and serve a term of 6 years. No member of the
Board or any of his relatives within the fourth civil degree of consanguinity or affinity shall have
any interest, either as investor, officer or director, in any generation company or distribution
utility or other entity engaged in transmitting, generating and supplying electricity specified by
ERC. Below is a table listing the board of directors of TRANSCO.
Power Distribution

Electricity line post in Tagaytay

The circulation of electricity to end-users is a controlled common carrier business requiring a
national franchise. The power to grant national franchises is exclusively vested to the Congress
of the Philippines. Distribution of electric power to all end-users or consumers of electricity may
be handled by private distribution utilities, cooperatives, local government units presently
undertaking this function and other duly authorized entities, under the regulation of the ERC.
A distribution utility has the task to provide distribution services and connections to its system
for any end-user within its franchise area, as there are different distribution utilities available for
different areas, consistent with the distribution code. They are required to provide open and non-
discriminatory access to its distribution system to all users.
Retail rates charged by distribution utilities are subject to regulation of the ERC under the
principle of full recovery. Under full recovery, distribution utilities subdivide their retail rate into
two distinct categories, namely pass through charges and wheeling charges. Pass through charge
follows the principle of full economic recovery where a distribution utility may pass on all the
charges it incurred in the distribution of power such as the price of the power, transmission
charge, systems loss charge, etc. to its customers. The wheeling charge is an additional premium
charged to the customer akin to a mark-up on the cost of power acquired by the distribution
utility. The wheeling charge follows the principle of reasonable return on base (RORB) which
allows the distribution utility to operate viably as determined by the ERC.
According to the National Electrification Administration (NEA), the distribution sector is
composed of 119 electric cooperatives, 16 privately owned utilities and six local government-
owned utilities as of 2009. These distribution utilities may acquire electricity from generation
companies or the WESM, when certified as the distribution of electricity requires a national
franchise, for distribution to residential, commercial, industrial and other users. NEA, the
government agency in charge of implementing programs to reinforce the technical capability and
financial viability of rural electric cooperatives, may act as guarantor for purchases of electricity
in the WESM by any electric cooperative or small distribution utility to support their credit
standing.
Currently, Meralco is the Philippines' largest distribution utility with a franchise area of 9,337
square kilometers covering Metro Manila, the entire provinces of Bulacan, Rizal and Cavite,
parts of the provinces of Laguna, Quezon and Batangas, and 17 barangays in Pampanga. The
franchise area is home to 23 million people, roughly a quarter of the entire Philippine population
of 89 million.
Power distribution outside the Metro Manila area is handled by private distribution utilities and
electric cooperatives.
Private Distribution Utilities (PDUs)
Private Distribution Utilities are electric distribution companies that are owned by private
entities. As of 2012, there are 19 private-investor owned electric distribution companies in the
Philippines.
AEC - Angeles Electric Corporation
BELS - Bauan Electric Light System
BLCI - Bohol Light Co., Inc.
CEDC - Clark Electric Distribution Corporation
CELCO - Camotes Island Electric
CELCOR - Cabanatuan Electric Corporation
CEPALCO - Cagayan Electric Power and Light Co., Inc.
COLIGHT - Cotabato Electric Light System
DECORP - Dagupan Electric Corporation
DLPC - Davao Light and Power Co., Inc.
IEEC - Ibaan Electric and Engineering Corporation
ILPI - Iligan Electric Light and Power Company, Inc.
LUECO - La Union Electric Company, Inc.
MECO - Mactan Electric Company, Inc.
MERALCO - Manila Electric Company
PECO - Panay Electric Co., Inc.
SFELAPCO - San Fernando Electric Light and Power Co., Inc.
SUBIC ENER. - Subic Enerzone Company
TEI - Tarlac Electric, Inc.
VECO - Visayan Electric Company
Electric Cooperatives (ECs)
 Electric Cooperatives (ECs) are entities owned by the end-users within the vicinity
covered by the said entity. They are controlled by a board of directors, who were elected by the
end-users. As of 2012, there are 120 coops recognized by the ERC.
Abra Electric Cooperative, Lubang Island Electric
ABRECO LUBELCO
Inc. Cooperative, Inc.
La Union Electric
LUELCO
Cooperative, Inc.
Aklan Electric Cooperative, Maguindanao Electric
AKELCO MAGELCO
Inc. Cooperative, Inc.
Albay Electric Cooperative, Marinduque Electric
ALECO MARELCO
Inc. Cooperative, Inc.
Agusan Del Norte Electric Masbate Electric
ANECO MASELCO
Cooperative, Inc. Cooperative, Inc.
Antique Electric Misamis Occidental I Electric
ANTECO MOELCI I
Cooperative, Inc. Cooperative Inc.
Agusan Del Sur Electric Misamis Occidental II
ASELCO MOELCI II
Cooperative, Inc. Electric Cooperative Inc.
Aurora Electric Mt. Province Electric
AURELCO MOPRECO
Cooperative, Inc. Cooperative, Inc.
Bantayan Electric Misamis Oriental I Electric
BANELCO MORESCO I
Cooperative, Inc. Cooperative, Inc.
Basilan Electric Misamis Oriental II Electric
BASELCO MORESCO II
Cooperative, Inc. Cooperative, Inc.
Batanes Electric Nueva Ecija I Electric
BATANELCO NEECO I
Cooperative, Inc. Cooperative, Inc.
Batangas I Electric Nueva Ecija II Electric
BATELEC I NEECO II
Cooperative, Inc. Cooperative, Inc.
Batangas II Electric Nueva Ecija III Electric
BATELEC II NEECO III
Cooperative, Inc. Cooperative, Inc.
Benguet Electric Negros Occidental Electric
BENECO NOCECO
Cooperative, Inc. Cooperative, Inc.
Biliran Island Electric Negros Oriental I Electric
BILECO NORECO I
Cooperative, Inc. Cooperative, Inc.
Busuanga Island Electric Negros Oriental II Electric
BISELCO NORECO II
Cooperative, Inc. Cooperative, Inc.
Bohol I Electric Northern Samar Electric
BOHECO I NORSAMELCO
Cooperative, Inc. Cooperative, Inc.
Bohol II Electric Nueva Viscaya Electric
BOHECO II NUVELCO
Cooperative, Inc. Cooperative, Inc.
Bukidnon II Electric Occidental Mindoro Electric
BUSECO OMECO
Cooperative, Inc. Cooperative, Inc.
Cagayan I Electric Oriental Mindoro Electric
CAGELCO I ORMECO
Cooperative, Inc. Cooperative, Inc.
CAGELCO II Cagayan II Electric PALECO Palawan Electric
 Cooperative, Inc. Cooperative, Inc.
Camiguin Island Electric Pangasinan I Electric
CAMELCO PANELCO I
Cooperative, Inc. Cooperative, Inc.
Camarines Norte Electric Pangasinan III Electric
CANORECO PANELCO III
Cooperative, Inc. Cooperative, Inc.
Capiz Electric Cooperative, Pampanga I Electric
CAPELCO PELCO I
Inc. Cooperative, Inc.
Cagayan De Sulu Electric Pampanga II Electric
CASELCO PELCO II
Cooperative, Inc. Cooperative, Inc.
Camarines Sur I Electric Pampanga III Electric
CASURECO I PELCO III
Cooperative, Inc. Cooperative, Inc.
Camarines Sur II Electric Peninsula Electric
CASURECO II PENELCO
Cooperative, Inc. Cooperative
Camarines Sur III Electric Pampanga Rural Electric
CASURECO III PRESCO
Cooperative, Inc. Cooperative
Camarines Sur IV Electric Province of Siquijor Electric
CASURECO IV PROSIELCO
Cooperative, Inc. Cooperative, Inc.
Cebu I Electric Quezon I Electric
CEBECO I QUEZELCO I
Cooperative, Inc. Cooperative, Inc.
Cebu II Electric Quezon II Electric
CEBECO II QUEZELCO II
Cooperative, Inc. Cooperative, Inc.
Cebu III Electric Quirino Electric Cooperative,
CEBECO III QUIRELCO
Cooperative, Inc. Inc.
Central Negros Electric Romblon Electric
CENECO ROMELCO
Cooperative, Inc. Cooperative, Inc.
Central Pangasinan Electric San Jose Electric
CENPELCO SAJELCO
Cooperative, Inc. Cooperative, Inc.
Cotabato Electric Samar I Electric Cooperative,
COTELCO SAMELCO I
Cooperative, Inc. Inc.
Davao Del Norte Electric Samar II Electric
DANECO SAMELCO II
Cooperative, Inc. Cooperative, Inc.
Davao Del Sur Electric Siargao Island Electric
DASURECO SIARELCO
Cooperative, Inc. Cooperative, Inc.
Dinagat Island Electric Siase Island Electric
DIELCO SIASELCO
Cooperative, Inc. Cooperative, Inc.
DORECOORECO Sorsogon II Electric
II Cooperative, Inc.
Guimaras Electric Sultan Kudarat Electric
GUIMELCO SUKELCO
Cooperative, Inc. Cooperative, Inc.
Ifugao Electric Sulu Electric Cooperative,
IFELCO SULECO
Cooperative, Inc. Inc.
Iloilo I Electric Surigao Del Norte Electric
ILECO I SURNECO
Cooperative, Inc. Cooperative, Inc.
ILECO II Iloilo II Electric SURSECO I Surigao Del Sur I Electric
 Cooperative, Inc. Cooperative, Inc.
Iloilo III Electric Surigao Del Sur II Electric
ILECO III SURSECO II
Cooperative, Inc. Cooperative, Inc.
Ilocos Norte Electric Tarlac I Electric Cooperative,
INEC TARELCO I
Cooperative, Inc. Inc.
Ilocos Sur Electric Tarlac II Electric
ISECO TARELCO II
Cooperative, Inc. Cooperative, Inc.
Isabela I Electric Tawi - Tawi Electric
ISELCO I TAWELCO
Cooperative Cooperative, Inc.
Isabela II Electric Tablas Island Electric
ISELCO II TIELCO
Cooperative Cooperative, Inc.
Kalinga Apayao Electric Ticao Island Electric
KAELCO TISELCO
Cooperative, Inc. Cooperative, Inc.
Lanao Del Norte Electric V-M-C Electric Cooperative,
LANECO VRESCO
Cooperative, Inc. Inc.
Lanao Del Sur Electric Zamboanga City Electric
LASURECO ZAMCELCO
Cooperative, Inc. Cooperative, Inc.
Leyte I Electric Zambales I Electric
LEYECO I ZAMECO I
Cooperative, Inc. Cooperative, Inc.
Leyte II Electric Zambales II Electric
LEYECO II ZAMECO II
Cooperative, Inc. Cooperative, Inc.
Leyte III Electric Zamboanga Del Sur I Electric
LEYECO III ZAMSURECO I
Cooperative, Inc. Cooperative, Inc.
Leyte IV Electric Zamboanga Del Sur II
LEYECO IV ZAMSURECO II
Cooperative, Inc. Electric Cooperative, Inc.
Leyte V Electric Zamboanga Del Norte
LEYECO V ZANECO
Cooperative, Inc. Electric Cooperative, Inc.
Table 3. List of Electric Cooperatives in the Philippines.
Municipal Utility (MU)
MUs are entities that are owned by the local government. The local government officials,
who are elected by the end-users within the municipality, regulates, controls, and manages the
utilities. As of 2012, only one municipal utility is recognised by the ERC: Olongapo City.
Supply Sector
The supply sector are suppliers of electricity to the contestable market. Pursuant to
EPIRA, the implementation of retail competition and open access allows for the establishment of
a contestable market. The contestable market can be serviced by any interested party even
without a national franchise. However, they must be licensed by the ERC. As the supply sector is
not considered a public utility activity, the ERC does not regulate rate-making. However, the
ERC still monitors and determines anti-competitive behavior.
The contestable market are end-users with an average monthly peak demand of 750 kilowatts.
The ERC plans to reduce this level until it reaches average household demand.
Power Supply Shortage 2014-2015
According to several articles and news sites, the Philippines faced a power supply
shortage leading to rolling blackouts across the country during the years 2014-2015. In late
2014, President Aquino requested the Congress to pass a resolution giving him emergency power
to allow the government to provide additional supply and prevent a power shortage in 2015.
However, the passing of the resolution was delayed and Aquino admitted that his original plan
was no longer feasible. His proposal was tweaked and the Interruptible Load Program (ILP) was
recommended for use in the Luzon power grid instead. The ILP essentially enrolls large
establishments, including government owned and controlled corporations, with their own
generators to voluntarily disconnect from the main grid and switch to their generators instead
when a power outage was predicted. Their rationale was that a power outage would cause these
establishments to run on generators anyway so it is more beneficial for them to run their
generators in an organized fashion.
Malampaya Shortage
According to several articles such as from Rappler, the Malampaya gas facility shortage
is responsible for 40-45 percent of Luzon's grid in terms of electricity consumption. Glitches and
pipe leaks play a big role in the shortage of electricity as it affects the gas flow restriction for
safe operations in the deep water gas-to-power project. The restrictions placed in the Malampaya
gas supply greatly impacts the power reserves and the power consumption of the end-users or the
households in the Philippines. Although the facility can be restored to normal operations, there
never is an assurance of the incident not happening again. There is no guarantee that the
Malampaya gas facility will operate perfectly which is why it is advised to practice energy
efficiency and conservation mainly because of power shortage and rate hikes.
National Power Corporation

NAPOCOR power barge No. 119 in Isabela, Basilan

According to several articles, EPIRA introduced reforms, including the restructuring of
the power sector leaving a heavy dent on the states budget because of the high cost of
maintenance. Menandro Abanes, a researcher on Southeast Asian issues, said, “To meet the
predicted demand, 5,000 megawatts was needed, translating to necessary government infusion of
approximately P38 billion annually into the development of the power industry to curb the
shortfall, without which another power crisis reminiscent of the 1980s and 1990s was expected."
The government, however, was unable to infuse funds into because of a budget deficit that hit
P145 billion at the time. Furthermore, by December 2000, NPC has accumulated a debt of 900
billion pesos, which at that time was nearly half the government's total debt of 2.179 trillion
pesos. To resolve this issue, the government had no choice but to rely on the option of
privatization of the power industry.
One of the solutions implemented by the government is the inclusion of the universal
charge in the end consumer's bill. The universal charge is used to pay part of the stranded costs
of the NPC. Stranded costs are incurred when the selling price of a good is less than the cost to
produce it, this usually results in a net loss to the company. The universal charge is also used to
pay part of the NPC's long term debt obligations.