Energy Cost Competitiveness and Self-Sufficiency

1. Energy Cost Competitiveness and Self-Sufficiency Ambassador Donald G. Dee Philippine Chamber of Commerce and Industry National Competitiveness Summit 06 October 2006

2. VISION STATEMENT A fully competitive energy sector that provides reliable, cost-efficient power, access to all Filipinos, and investor return

3. SITUATIONER • Globally-competitive and cost-effective price of energy • Ensure energy self sufficiency

4. DIAGNOSIS OF THE CHALLENGE • Cost-effective Price • Privatization prior to open access (competition) • Privatization stalled; lack of competition • Energy Self-Sufficiency • Uncertainty of supply and demand scenarios • Unpredictable investment climate due to EPIRA amendments • Lack of policy framework, analysis and information for the development of alternative fuels

5. SUMMARY OF KEY RECOMMENDATIONS • Cost-effective Price • Short-term • Reduce Transco rate by 30% • Implement the Customer Choice Program for 1MW users and for SMEs through aggregation • Implement the enhanced One-Day Power Sales program • Allow NPC IPPs to purchase own fuel • Medium-term • Review EPIRA • PSALM to transfer management and control of power plants under contract with NPC to IPP Administrators

6. SUMMARY OF KEY RECOMMENDATIONS Energy Self-Sufficiency • Private sector must enter into long-term contracts with NPC and other generating companies • Determine the 10-year supply and demand/scenarios • Conduct an “Energy Summit” to generate interest in the privatization of existing capacity and the need for new capacity • Passage of legislation on alternative fuels • Promote and disseminate information on viable alternative fuels

7. Thank You