Consumer Hopes In The New ERC – Rise of a Regulatory Phoenix

David Celestra Tan, MSK
19 November 2018

From the ashes of the Salazar-era ERC that flamingly crashed to the ground amidst the Meralco midnights CSP scandal, we hope will rise the Phoenix of a new ERC with an enlightened regulatory soul, freed from the bondage of their decades old capture by the vested interests, with renewed courage, moral compass and resolve for the fair and reasonable protection of the public interest, and now truly committed to its mandates under sec 23 of the Epira law that created it.

These are what we consumers hope to see in the new ERC

1. An enlightened regulatory soul

Consumers are not asking the ERC to be anti-capitalist, only to balance the profit greed with the equal right of the public to fair treatment, least cost power, and be safeguarded from exploitation

Actually doing so is not that complicated. Commissioners only need to have purer hearts to internalize its regulatory obligations as clearly and plainly spelled out under Section 23 of the Epira law. Or just simply be God-fearing humans morally answerable to a higher being.

2.An enlightened and sensitive recognition that its rate setting methodology PBR is unjust to consumers and actually illegal.

A 25% annual return of Meralco and a reported 40% annual dividend of NGCP from PBR are atrociously way in excess of the 12% ruled by the Supreme Court. Certainly contrary to public interest. In this modern day battle of the landed elite and rubber barons against us the peasants and the proletariat, we hope the ERC will come up with a happy and respectful balance. Consumers do not always have to lose.

3. A renewed commitment to creating true competition in the power generation sector as the sustainable way for continuous flow of private investments in new facilities, more efficient operations, and cost effective and climate friendly technologies contracted on arms-length basis.

4. A recognition that True competition in the generation sector can be created only if we control the concentration of the market domination of electric distribution and the cross ownership and self dealing by power generators affiliated and cartelized by the Distribution utlity groups.

5. To be driven to be more efficient, responsive, and timely by streamlining itself. By focusing on what truly needs to be regulated and unburdening itself of those that do not need regulation. To wisely decentralize itself by being less chairman centric and dividing the regulatory landscape to areas of specialization. To prune its COC bureaucracy and process that only duplicates the NGCP and WESM testing processes.

6. To be more consumer sensitive by dispensing with its anti consumer processes like it’s strictly judicial rituals that deter consumers legitimate concerns from being heard. It will be nice to see ERC set up a consumers’ assistance office and provide for a consumers only hearing sessions free from DU lawyer intimidation.

7. An ERC that will step up to and take to heart its motu proprio obligations to protect the public interest.

If those are vague righteous concepts, let us watch these Specific test areas

a. Will they reconsider PBR and create a truly performance based methodology? Will they limit profits only on incurred investments as required by section 25 of the Epiralaw. Will they adopt one that is in the public interest?

b. How will they resolve Meralcos 3,551mw caper and its brazen evasion of the CSP policy and ERC’s evident role in facilitating it? Will they trim the greed components from Atimonan One’s negotiated rate?

c. Will ERC finally correct its formula in determining concentration of installed capacity by restoring the new rules adding an ownership and operation tests to control test. ERC deferred this on March 15 2016, in the same session they famously decided to extend the implementation of the CSP policy?

d. Will ERC discard its rules of averaging in systems loss computation and define the limit as absolute? Averaging allows for unduly charging captive consumers systems loss of 9.5% and charge industrial and large consumers only 3.75% resulting to its still complying 6.75%. this is a form of cross subsidy that is declared illegal by the Epira Law.

e. Will the ERC finally create a consumers assistance office providing full legal and logistical support and adding a consumers only sessions in its processes?

f. Will they be faster and more methodical in facilitating the Capex applications of electric coops so that they start rebuilding their distribution systems? Will they start issuing prudent provisional authorities as a way forward?

g. Will they stop the perennial vicious cycle of Meralcos overcharges and refunds? Will they stop facilitating Meralco’s effectively duping the public by allowing it to keep the extra profits from higher energy sales that exceeded the projections the ERC used in computing its per kwh retail rate? This practice is one reason Meralco is making billions more money a year than legally allowed under its MRA. The New ERC commissioners are probably being brainwashed into accepting this silent trick as normal and legal.

Since 2003 the electric consumers have been let down by the ERC Commissioners. With a new set of ERC Commissioners, let us hope we finally will get a fair deal, founded on respect, and basic compliance with the law.

h. Will they insist on legitimizing Unsolicited Proposals and Swiss Challenge in the power procurement and contracting rules that are contrary to DOE policy?

These are our hopes in the new ERC and we the consumers are anxiously watching.

MatuwidnaSingilsaKuryente Consumer Alliance Inc.
matuwid.org
david.mskorg@yahoo.com.ph