a.

Evolution of Power System

1890
1895
1901

1936
1937
1939

Electricity was first introduced in the Philippines with the installation of three
electric arc lamps in Escolta, Manila.
The first power station was built.
The Manila Electric Light and Railroad Company (MERALCO) took over
the franchise for providing electricity to Manila and 57 municipalities
around the city.
Private electric utilities were also established during this period in other major
cities and towns throughout the country.
The government enacted Commonwealth Act 120, creating National Power
Corporation (NPC) for the purpose of developing hydroelectric potential
in the country.
The NPC started its operation developing studies for hydroelectric plants
throughout the country.
NPC constructed its first project the 8 MW Caliraya Storage Hydro Power
Station in Lumban, Laguna.

b. The New Power System Under EPIRA (R.A. 9136 of 2001)

According to an evaluation document of the Asian Development Bank (ADB),
the East Asian financial crisis of 1997 greatly affects many countries in East Asia
including the Philippines. The government of the Philippines began a program to
restructure the power sector and make the countrys electricity reliable, accessible,
affordable, and sustainable. This effort was embodied by the Electric Power Industry
Reform Act (EPIRA) of 2001. The ADB support the governments loan for restructuring
and privatization plans.
On June 08, 2001, President Gloria Macapagal-Arroyo (President of Republic of
the Philippines from January 2001 to June 2010) signed into law Republic Act 9136, or
the Electric Power Industry Reform Act of 2001. Bringing down electricity rates and
improving the delivery of power supply to end-users by encouraging greater competition
and efficiency in the electricity industry are among the other designed benefits of the
R.A. 9136.
The restructuring program under the EPIRA involved;
i.
Disaggregating the industry into generation, transmission, and distribution;
ii.
Introducing competition in generation and supply;
iii.
Introducing a wholesale electricity spot market (WESM);
iv.
Privatizing generation and operation of transmission by a concessionaire;
v.
Introducing open access to distribution networks; and
vi.
Setting up an independent agency to regulate the industry.

c. Major Components of Deregulated Power System

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