[READOUT] The race to deliver cheaper power

Across system loss, rooftop solar, nuclear power, and renewable energy auctions, many hard questions remain — especially about who pays and whether government can turn policy into action After President Ferdinand Marcos Jr. spent a good portion of his latest State of the Nation Address talking about energy, lower power bills have now become a political deliverable. Because of this, several reforms have unusual momentum. But across system loss, rooftop solar, nuclear power, and renewable energy auctions, many hard questions remain — especially about who pays and whether government can turn policy into action. The issue that is top of mind is system loss, which Marcos pushed into the headlines by ordering that consumers stop paying for electricity lost through distribution or through theft. The House energy committee began deliberations on August 5. Energy committee chairperson Jose Alvarez wants to draft amendments to the Electric Power Industry Reform Act (EPIRA) this month. Separate Senate proposals remain pending at the committee level. Energy Secretary Sharon Garin aims to remove the charge before Marcos’ final SONA in 2027. The emerging compromise is to separate unavoidable technical losses from pilferage and other nontechnical losses. Consumers might end up temporarily paying a limited allowance for technical system losses Recovery of nontechnical losses could be phased out first. Private distribution utilities and financially weaker cooperatives could face different caps or timelines. The political tailwind is strong because this is now a presidential commitment with support in both chambers. But remember, someone will still have to bear the burden. Distribution utilities and cooperatives could lobby hard against an abrupt removal, especially if it comes without subsidies. While system loss has dominated the debate, the bigger long-term opportunity may actually lie in tackling generation costs, which account for about two-thirds of a typical electricity bill. Sariling Kuryente is one way to tackle that by making rooftop solar and batteries easier for households and businesses to install. The proposal, already endorsed by Marcos and sponsored by Speaker Bojie Dy and House Majority Leader Sandro Marcos, would remove unnecessary permitting, studies, and utility fees for systems that do not export electricity to the grid. Where does it stand now? House Bill (HB) 10431 has been filed. This means the next step is committee deliberation. A Senate counterpart and approval from both chambers would be needed down the road. Beyond this long legislative path ahead, Sariling Kuryente may also find itself up against resistance from distribution utilities, homeowners’ associations, and property developers whose approval powers and fees would be reduced. For nuclear energy, the legal foundation is already largely in place. Republic Act No. 12305 established PhilATOM as an independent nuclear regulator. The Department of Energy is now finalizing its revised Nuclear Capacity Tender Guidelines and evaluating a first project site with IAEA assistance. The agenda now has shifted from legislation to implementation. The next milestones are fully operationalizing PhilATOM, completing site and tender rules, and launching the first nuclear capacity procurement. While presidential backing and existing regulatory laws provide momentum, public acceptance, financing, waste management, and long construction timelines may still stand in the way of Marcos’ nuclear ambitions. READ: Why not nuclear? Marcos pushes for controversial energy source in SONA 2026 Though nuclear might only be at the start of what could be a long procurement journey, the government’s renewable energy auctions are now at the stage of execution. Unfortunately, things aren’t all so rosy. Offshore-wind GEA-5 remains suspended and under recalibration, with a policy circular targeted by August 24, supplemental terms by October 2, and an indicative auction on December 1. GEA-6’s 160-MW biomass terms are nearing release, while the auction for solar-plus-storage across 20 NAPOCOR islands is being designed for rollout in 2027. The government hasn’t been historically quick to translate auction awards into operating capacity. Less than 20% of capacity awarded under GEA-1 and GEA-2 have been completed, according to the World Bank. GEA-5’s suspension over port, environmental, supply chain, and grid-readiness issues shows that execution risk remains material. But there’s reason to be optimistic about more renewable buildouts, given strong demand for indigenous capacity and a compelling cost case, especially on islands where diesel generation averages P18/kWh and can reach P62/kWh. READ: Cheaper PH electricity? Go beyond system loss; fix costly power contracts Besides measures directly tied to cutting power bills, these are two other proposals worth keeping on your radar. Waste-to-energy The House has passed HB 9157 on third reading, while several Senate versions remain pending at the committee level. The main hurdles are reconciling incineration with existing environmental laws and making projects commercially bankable. Strategic petroleum reserve Multiple House proposals remain under committee or technical-working-group review, while SB 1934 is pending in the Senate energy committee. The next step is consolidating competing proposals and settling differences over reserve size, financing, PNOC’s role, and the rules for releasing emergency supplies. We hope this readout helps inform your next strategy or boardroom decision. And as always, feel free to tell us what to tackle next, dear business leader. – Rappler.com How does this make you feel? Loading