Auditing Power, Water, and Telecommunications Industry
INTRODUCTION
Utilities and telecommunications
essential services that play a vital role in economic and social development.
Quality utilities
are a prerequisite for effective poverty eradication.
Industries:
i) Power industry
ii) Water industry
iii) Telecommunication industry
POWER INDUSTRY IN PHILIPPINES
Electric power industry
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1890-1960s;
started in Philippines as private sector-led industry.
1969
Gov pursued rural electrification.
through cooperative business model.
1973
started monopoly of generation
by National Power Corporation (NPC)
1987
re-entry of private sector in generation sector through
independent power/owner producers (IPPs)
POWER GENERATION
not considered as a public utility operation
interested parties do not need to secure a congressional
franchise to operate a power generation company.
TYPES OF SOURCES OF ENERGY
 CONVENTIONAL SOURCES
 NON-CONVENTIONAL SOURCES
Alternative Sources of Energy
 Hydropower
 biomass power
 wind power
 geothermal power
 solar power
POWER TRANSMISSION
a common carrier business:
 regulated by the government,
 serves its franchise area without discrimination,
 responsible for any losses incurred during delivery
It is regulated by Energy Regulatory Commission (ERC) who
has rate-making powers and final say in valuation of
transmission assets.
POWER DISTRIBUTION
Distribution of electric power to all end-users or consumers of
electricity
handled by:
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private distribution utilities,
cooperatives,
local government units
presently undertaking this function and
other duly authorized entities,
under the regulation of the ERC.
Private Distribution Utilities (“PDUs”)
electric distribution companies owned by private entities.
Electric Cooperatives (“ECs”)
entities owned by member-consumers.
within vicinity covered by the said entity.
Municipality Unit (“MUs")
entities owned by the local government.
THE IMPACT OF COVID-19 ON THE POWER INDUSTRY
With the prevalent economic impact of the pandemic, power
industry is expected to have a
decline in
energy demand,
coal utilization in the spot market,
collection efficiencies of Electric Cooperatives, and
delays in
renewable energy projects.
Addtl notes:
MERALCO Manila Electric Company-priv
TARELCO Tarlac Electric Cooperative Inc.
NGCP National Grid Corporation of the Philippines-priv
WATER UTILITY INDUSTRY
Ph main components of water resources management vested
in mandates of various government agencies that undertake
most of water resources programs and projects in the
country.
TELECOMMUNICATIONS INDUSTRY
Telecommunications industry
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National Water Resources Board (NWRB)
 created in 1974 as authoritative national organization.
 coordinate and integrate all activities in water resources
development and management.
Agencies involved in water supply and distribution:
 (DPWH) Department of Public Works and
Highway
 (DILG) Departments of Interior and Local Government
 Local Governments
 (MWSS) Metropolitan Waterworks and Sewerage
Services
 (LWUA) Local Water Utilities Administration
Water infrastructure provided is classified into three levels:
Level I
Stand-alone water points
serving average of 15 households w/i 250m distance
Level II
Piped water with a communal water point.
serving average of 4–6 households w/I 25m distance
Level III
Piped water supply with a private water point.
based on daily water demand of MT 100L per person
Common water sources and water treatment plants
Water sources (AIL)
 Angat Dam
 Ipo Dam
 La Mesa Dam
Water treatment plant (BEC)
 Balara treatment plant
 East La Mesa treatment plant
 Cardona treatment plant
The Impact of COVID-19 on the Water industry
The COVID-19 pandemic has increased the need for clean
water to prevent infection, while making it more difficult for
some remote and vulnerable communities to access supplies
1995
industry was deregulated when
President Fidel Ramos signed Republic Act 7925 (Public
Telecommunications Policy Act of the Philippines)
Effect of the law:
 opened sector to more private players
 improved the provision of telecom services at better
and fairer rates.
 lead to creation of many telecommunication service
providers for mobile, fixed-line, Internet and other
services.
Other regulatory frameworks relative to this industry
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RA 3846 Radio Control Law of the Philippines
RA 6849 Municipal Telephone Act of 1989
RA 7925 Public Telecommunications Policy Act of the
Philippines
RA 10844 department of information and
communications technology act of 2015
Republic Act No. 11934 SIM Registration Act “SIM card
law”
a Philippine law mandating the registration of SIM cards
before activation.