Competition is a vital driving force in any kind of industry. Without competition, one business may end up monopolizing an entire industry, which would most likely lead to two things: inferior products and exorbitant prices.

One very important benefit of competition is its boost to innovation, while keeping the prices of commodities at their lowest. Hence, when a product is sold within the range set by competitors in the same industry, it is called, “competitive.” Competition among companies can also help spur the invention of new products and improve service delivery.

A prime example of this is the Philippines’ telecommunications industry, where customers have a wide array of service providers to choose from for their mobile and internet needs. This steep competition among suppliers paved the way to such promotions as “unli call and text” in their bid to win the hearts of their customers.

Now, imagine if that were the case in the country’s energy industry. Imagine a robust power sector, with several different power players vying for the attention of Filipino consumers. Imagine if each household had the freedom to choose which distribution utility to avail their services from. Imagine these electricity companies sprouting their promos left and right:

Unli-kuryente, anyone?

The truth is, we really don’t need to imagine. Competition in the energy industry is not too far from our reality – in fact our laws ensure it.

The landmark Republic Act 9136 or the Electric Power Industry Reform Act (EPIRA) is the policy that governs the country’s power industry. EPIRA is based on open competition among private power generation companies.

Basically, EPIRA serves as the "guidebook" on how open competition should be administered. There is a notion that open competition results in better services and lower prices.

Power generation companies, known in the power industry as Independent Power Producers (IPPs), are free to contract, usually through Power Service Agreements (PSAs), with Distribution Utilities (DUs).

Before these PSAs are finalized, though, these have to undergo the Competitive Selection Process (CSP). The CSP is a bidding process for the most affordable generation rate to be bought by the DU, a process that ERC requires.

The CSP is expected to yield the delivery of the best services at the least cost to consumers, as well as ensure a fair, reasonable, and cost-effective generation charge, under a transparent power sale mechanism between the generation companies and the DUs. It was designed to benefit consumers by keeping electricity prices low and the quality and choice of and services high.

Competition will keep energy companies on their feet -- constantly innovating and working to provide the best service to retain their customer base. This lessens the likelihood of overcharging, intermittent service, power interruptions, and the like.

The EPIRA Law and the existing CSP are mechanisms to ensure that healthy competition thrives in the energy sector to protect consumers from sneaky pass-on charges, unreasonable power rate spikes, and unscrupulous business practices.

‘Electrifying a Nation’, Kuryente.Org’s research paper offers an in-depth look at the country’s energy industry, and it shows how its history is replete with corruption and inefficiency. In 1972, for instance, under martial law, the government and the National Power Corporation (NAPOCOR) sequestered Meralco and other power distributors and were placed under the Office of the President. Because the power sector has been in a state monopoly, corruption became rampant at the highest levels of government in contracting large energy infrastructure projects.

In the 1990s, the country was under an energy crisis that resulted in the passage of Republic Act 7648 or the Emergency Power Crisis Act (EPCA). This allowed the executive branch under President Fidel V. Ramos to enter negotiated contracts in order to fast-track the construction, repair, rehabilitation, improvement, or maintenance of power plants, projects, and facilities.

What followed is a period of inefficiency in the energy industry. Extensive bribery within the public administration and companies became vulnerable to manipulation and extortion by public officials and energy industry players who were in bed with politicians. Favoritism and undue influence are widespread in the industry, resulting in unfair competition and an uncertain energy industry.

We, at Kuryente.Org, believe that with the EPIRA Law in place, Filipino consumers, as well as the power sector, are protected against abusive practices and corruption that the industry had been known for in the past decades. Hence, we urge the full implementation of EPIRA, CSP, as well as the lifting of the TRO on the Retail Competition and Open Access.

We believe that any preclusion to fair and healthy competition in the energy industry will only revert the country to those “dark ages”, where only a privileged few had control and monopoly over the country’s energy supply and corruption and bribery were highly rampant.

With fair and healthy competition giving a much-needed boost to our country’s energy industry, the choices consumers can make need not be left to the imagination.