ERC says it shares Nasecore’s aspiration

I WOULD like to thank the Inquirer for publishing the letter of Pete L. Ilagan, president of the National Association of Electricity Consumers for Reforms (“Betrayal of public trust; WESM hoax,” Opinion, 6/24/16).

Some items in the letter call for clarification and rectification.

First, let me assure the electric power stakeholders—and these include electricity consumers and Ilagan—that the Energy Regulatory Commission (ERC), through our Investigation and Enforcement Division (IED), has been conducting annual regulatory inspections of all distribution utilities (DUs) to ensure their compliance with the amended Distribution Services and Open Access Rules (DSOAR) and all directives embodied in the ERC orders,
decisions, rules and regulations.

Our IED is also tasked to evaluate the DUs’ monthly Uniform Reportorial Requirements (URR) submissions to determine the correctness of their charges vis-à-vis the approved rates. Records show that in cases where a URR evaluation resulted in any discrepancy from the authorized rates, the ERC issued an order either to refund the concerned customers or collect from them.

Let me assure Ilagan that we are one with him in his aspiration to bring down the electricity rates. This is why we have been reviewing and revisiting our rate-making methodologies, particularly the performance-based regulation (PBR). The policy review of the PBR is meant to make it more responsive to the changing landscape of the electric power sector with the paramount purpose of benefiting the consuming public in terms of lower electricity rates.

A PBR position paper will be released prior to the conduct of public consultations (PubCons), for electric power industry participants to comment on. PubCons provide an avenue for the stakeholders to scrutinize the ERC’s proposed policies before they are promulgated.

Regarding the Wholesale Electricity Spot Market (WESM), an audit has been completed by an independent auditor—Reyes, Tacandong & Co. The audit ascertained: (a) the reasonableness of the costs incurred by Philippine Electricity Market Corp. (PEMC) as to personnel services, maintenance and other operating expenses and capital expenditure; (b) compliance by PEMC with the ERC, WESM and Department of Energy orders, rules and regulations, as well as with the requirements of other government agencies (Bureau of Internal Revenue and Securities and Exchange Commission); and (c) the proper recognition and recording of market fees and other sources of receipts in the books of PEMC. The final audit report is due to be submitted to the ERC soon.

We would like to thank Ilagan for his vigilance in matters relative to the electric power industry. The ERC shares his advocacy to promote and protect the consumers’ long-term interests in terms of providing safe, adequate, reliable and efficient electric service.

—JOSE VICENTE B. SALAZAR,chair and CEO,
Energy Regulatory Commission