The Philippine Power Sector: Part 1

The Process and the Players

(Disclaimer: This is an unofficial, layman-focused attempt to describe how we, ordinary people, get electricity in our homes.)

We Filipinos get power through a “collaboration” of private and public sector facilities. To help us understand how we get electricity and why it costs so much, we will look at how it really is produced, and the business-economics behind it.

Generally, the power is generated by power generation companies with their power plants. The power they generate is transmitted through a network of transmission lines to substations, which then transmit the electricity to distribution utilities (DUs) like Meralco. These DUs will then distribute the electricity to residential and commercial consumers.

Based on this simple description, we could then classify the players in the power sector into power generation, power distribution and power distribution.

Power generation sub-sector involves both private and government-owned entities involved in generating electricity. The most prominent player in this sub-sector is the National Power Corporation, or NPC, which is a government-owned and controlled corporation (GOCC). With the implementation of RA 9136 or the Electric Power Industry Reform Act of 2001 (EPIRA) power generation ceased to be a public utility, and NPC's generation assets (both fossil-based and renewables-based) were to be privatized. The logic of this mandate is to give this utility to the private sector which has better interest in pursuing efficiency and can manage the risks of power generation as a good with fluctuating value in the market (I think).

Transmission sub-sector is mostly a monopoly, with the National Transmission Corporation (TransCo) as the only participant. TransCo, as provided for in EPIRA, has contracted its operation and maintenance responsibilities to the National Grid Corporation of the Philippines (NGCP), while retaining asset ownership of their 19,425 circuit kilometers of transmission lines and 23,853 MVA of substation capacity (as of end-2009).

Distribution sub-sector is a combination of private DUs and public utility cooperatives. Meralco and Davao Light and Power Corporation are two of the few private DUs. In the countryside, electricity is mostly distributed by electric cooperatives (ECs). These private DUs and ECs make electricity available to us, families as well as commercial entities, and we pay them for the whole process--from generation, through transmission, to distribution, as well as the business of doing it.

Of course, not all parts of the Philippines have access to grid power (i.e., power that is received from the nationwide network of electricity supply, or power grid). While President Gloria Arroyo reported in 2009 that 99.99 percent of barangays in the country already have access to grid power (umabot na sa halos lahat ng barangay ang elektrisidad), it is different from access of power on the household level. Yes, it is possible to say that all barangay halls have access to power, but not all households in those barangays have electricity yet. (I will talk about this in another post, “Rural Electrification in the Philippines.”)

For now, we will stop here. So we have three players in this simple process. But how come we have brownouts in this age when there are more cellphones than Filipinos? There is more to it than the obvious.

Saturday after the SONA

It is the Saturday after the President's State of the Nation Address (SONA), which was last July 22. This post is not really about the SONA, but just a time reference.

Ubuntu Edge

I only understood Ubuntu Edge yesterday, after I read the article about it. I thought it was the same as the Ubuntu Phone which is planned for release next year. I realized that it is crowd-funded project exclusively for enthusiasts who are willing to shell out money to get this phone. I was inclined to compare it to Google Glass in terms of prototyping, which will be made available to a few users for its first (not sure if this is the correct word) release, but then realized that just by that description, it is far different.

 Ubuntu Edge will really only be given to those who will pledge to contribute money to the development and actual production of the concept phone. Google Glass is really funded by Google, and the first users are there to contribute to its final, commercial-model shape (I think this sentence is constructed poorly, but then again...). After Google's initial release, they get user feedback data, and then modify the Glass to suit the needs of the users. Ubuntu Edge, on the other hand, after that exclusive production, will not be made available to other interested individuals. They have to show their interest upfront.

I am very much interested with this phone: 128 GB storage, 4 GB RAM (at least), quad-core processor, metal body, sapphire crystal screen overlay, dual 4G LTE antennae, low-light (The specs are not yet final, as they may change depending on the available technology when production starts probably late this year.)

I just don't have and can't produce $780 in 25 days.

SONA Technical Report

So the President delivered the State of the Nation Address. Of course, it will have mixed reviews. What I am more interested in is for people to read the SONA Technical Report, the more detailed report behind the SONA speech. Dr. Michael Tan of UP Department of Anthropology wrote the value of the SONA Technical report here.

Things Learned at Work

I posted before that I wanted to post here things or concepts I learned at work. Hopefully, I will have time tomorrow. I want to write about the Philippine power industry.

However, just in case I forget, I will post here the link to the republic act which strengthened the National Electrification Administration, or NEA. NEA is the primary agency tasked with the electrification of the countryside.

Relationships

Just like in my previous post, I said my interest on the topic of relationships and communication has been reawakened. Probably due to personal interest? Probably. But yeah, I got interested again... After watching Hitch again. I hope to post more of that movie's quotes here.

Blog versus Facebook versus Twitter

When Twitter started in about 2009 (not sure, but I was one of the few which adopted Twitter for the College of Arts and Sciences early), I thought it solved my difficulty of having to write a lot before I could publish, which is how blogs work. It does not look good to post a blog article containing only 160 characters.

However, I learned that I missed writing on my blog. The audience is different. Writing for a blog is different (more difficult and integrative) to posting a Twitter status.  I will probably write a brief article about that in my (long delayed) future book

Hopefully, I have time. After the SONA Technical Report, I hope to lay out the CAS-UP Manila End of Term Report of Dr. Imperial.

Birthday Work

Last year, I also wrote on the day after my birthday, particularly the first few hours of my 32nd year living on this planet. Now, I am doing that again. I just want to write something, because last year, I wrote about missing writing.

Working on my birthday is not new for me. My first job was in a call center, working on graveyard shift. I worked for training companies. I worked at UP Manila. All of these companies required that I work on my birthday, even if it falls on a rest day.

Like now. It's 2:14 AM here in the Philippines, but I am doing the layout of something.

Anyway, right now, I just want to recognize and express my appreciation for the many people who have been part of my life. This is just a list. No expression except that first sentence in this paragraph, and this: "Thank you."

First and foremost, I thank God. For creating me, blessing me with both the capacity to do things according to His will, and the weaknesses to help me appreciate my position in this world and depend on Him. Nothing will happen without His permission. Even my failures, which led me here. Yes, here.

I am grateful for my family.
I am grateful for all my friends.
I am grateful for all my colleagues, now and before.

This is supposedly a long post, but I don't have time now. That is the reason I always try to express my appreciation when I feel it. Because at times like this, when I want to but I don't have the time, I just can't mention and really express my appreciation.

For you who allowed me to express my appreciation, thank you. Thank you so much.