Quantcast

Regulatory audit of power utilities


The year 2012 ended with so much to thank our Almighty God for, but it left behind the lingering question: Why does our Energy Regulatory Commission (ERC) keep on approving power rate increases contrary to the intent of the Electric Power Industry Reform Act (Epira)?

Perhaps, a closer look at the law that governs rate setting will help us identify where the problem lies.

Epira’s Section 43 (f), Functions of the ERC, reads: “The rate must be such as to allow the recovery of just and reasonable costs and a reasonable return on rate base (RORB) to enable the entity to operate viably.”

Clear is the fact that the primary objective of the ERC in fixing electricity rates is to allow a power utility, whether it is a distribution, transmission or a generation utility, to recover its just and reasonable cost of service.

The Supreme Court, in its decision in GR No. 166769, gave life to this law and showed its wisdom when it directed the ERC to request the Commission on Audit (COA) to conduct a complete audit of the records, books and accounts of Meralco.

Apprehensive that the Supreme Court directive may not be complied with to the letter, the National Association of Electricity Consumers for Reforms Inc. persistently wrote to the ERC calling its attention to the matter.

As expected, COA’s final audit report showed billions of pesos of “over-recoveries” by Meralco in two years of its operation alone. The over-recoveries discovered by COA referred to utility expenses or costs that were not directly related to the service of providing electricity, thus, these were recommended for refund.

Clearly, a regulatory audit of these power utilities becomes imperative so that only the costs directly related to the service of providing electricity can be charged to their captive customers.

Without an ERC regulatory audit, public interest is sacrificed to the undue advantage of the power utilities which, unbridled, rake in humongous profits, even as a new yoke of oppression is imposed on power consumers.

—PETE L. ILAGAN,

president, National Association of

Electricity Consumers for Reforms Inc.,

nasecore2003@yahoo.com


Follow Us


Follow us on Facebook Follow on Twitter Follow on Twitter


Recent Stories:

Complete stories on our Digital Edition newsstand for tablets, netbooks and mobile phones; 14-issue free trial. About to step out? Get breaking alerts on your mobile.phone. Text ON INQ BREAKING to 4467, for Globe, Smart and Sun subscribers in the Philippines.

Short URL: http://opinion.inquirer.net/?p=44187

Tags: Epira , ERC , law , Letters to the Auditor , opinion , power rates



Copyright © 2014, .
To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.
Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:
c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City, Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94
Advertisement
Advertisement

News

  • Obama, family cause a small stir at Easter service
  • Estrada: Gigi Reyes won’t testify vs JPE
  • Ancient enigmatic carvings in danger of disappearing
  • Tagle: Hope comes with warning on Easter
  • New plant to boost supply of clean energy
  • Sports

  • Goodbye MGM, Las Vegas for Pacquiao?
  • Rain or Shine drops Ginebra in big hole
  • Ateneo whips CSB; Davao debuts with win over FEU
  • PH pug Hipolito Banal decisions Colombian in Aiba
  • Former Pacquiao sparmate Porter keeps IBF title
  • Lifestyle

  • Transitions and resurrection in the performing arts
  • ‘Archaeology tour’ of Cebu’s heritage of faith
  • Historic Fort Bonifacio tunnel converted into a septic tank
  • ‘Imports’ from London, and play of the year
  • Korean animation comes of age
  • Entertainment

  • Easter musings
  • Solenn in shorts
  • Unmerry mix of attention-calling moves on ‘Mini-Me’ TV tilts
  • Persistence pays off for The 1975
  • Special section in LA fest for Filipino films
  • Business

  • BDO seen keen on bidding for Cocobank
  • Bataan freeport investment pledges up 1,302%
  • Golden Week
  • Bourse to woo Cebu stock mart investors
  • Supper power
  • Technology

  • Nasa’s moon-orbiting robot crashes down
  • Netizens pay respects to Gabriel Garcia Marquez
  • Nokia recalls 30,000 chargers for Lumia 2520 tablet
  • Facebook rolls out ‘nearby friends’ feature
  • Netizens seethe over Aquino’s ‘sacrifice’ message
  • Opinion

  • Gigi’s home
  • Palace stonewalls on MRT inquiry
  • Couple of things too
  • There is plenty of water behind Wawa Dam
  • Triduum thoughts of a young boy
  • Global Nation

  • Search for Etihad passengers launched
  • Japan presents $57-B ‘dream plan’ to solve Metro congestion
  • Tim Tebow’s charity hospital in Davao seen to open in 7 months
  • OFW died of Mers-CoV in Saudi Arabia, says family
  • Aquino, Obama to tackle US pivot to Asia during state visit
  • Marketplace