ERC chief bucks Akbayan complaint, resignation call

MANILA, Philippines—The Energy Regulatory Commission’s chairperson and CEO, Zenaida Cruz-Ducut, said Friday there was no irregularity in the quasi-judicial body’s approval of a staggered implementation of a record P4.15/kWh increase in power generation and other pass-on charges for the month of November  2013.

The increase has since been halted by an order from the Supreme Court.

“There was no irregularity in approving the clearance sought for the staggered generation cost-recovery of Meralco (Manila Electric Co.) because the decision was made only with the end view of cushioning the impact on the electricity consumers,” Ducut said in a statement released Friday in response to an administrative complaint filed by the party-list group Akbayan in the Office of the President.

The amount of the automatic pass-on charges, Ducut said, was computed based on rules which the ERC promulgated 10 years ago.

The complaint, according to the statement, accused Ducut of “gross neglect of duty and incompetence by tacitly approving without the barest hint of due process Meralco’s (Manila Electric Co’s) unprecedented power rate hike.”

Ducut said that some sectors, in their “vile attempt to muddle the truth” of the Meralco price hike issue, have resorted to “dirty tactics” designed to enrage the public at large and subject her to public ridicule.

She said that what the ERC approved on December  9, 2013 was the clearance sought by Meralco to stagger the collection of its generation cost for the November 2013 supply month and not the P4.15/kilowatt-hour rate increase. The increase, Ducut said, was calculated in accordance with the Automatic Rate Adjustment (AGRA) Rules that has been in force even before she became ERC chief.

Under the AGRA Rules, Ducut said, Meralco and all other distribution utilities can calculate their monthly generation charges based on the formula incorporated in the rules. This enables them to immediately recover their allowable generation costs without incurring any carrying costs that are also passed on to the consumers.

“While I speak for the entire ERC as its chairperson and CEO, our decisions are ‘collegial’ in nature and are based on law and regulations and not on my sole discretion, as some detractors would like the public to believe,” Ducut said.

On the call of Akbayan for her resignation, Ducut said that “the professionalism and reputation of the entire ERC organization is at stake here and I will not abandon but will lead my people to what is proper and appropriate. In my five years and seven months as chairperson and CEO of the ERC, the ERC has risen up through every challenge in the transition to an open and competitive electricity sector and delivered on its mandate.”

On the criticism regarding the slow pace of the probe into alleged collusion among the power generators, Ducut said that the ERC’s Investigating Unit was doing its best to come up with an impartial and comprehensive investigation report.

“People have to understand that the task relegated to us is very complex as it is data intensive. There are thousands of hours of trading intervals and price offers that need to be examined by the ERC-IU members. The ERC already asked the IU head about his timeline after the IU received data submissions from the Market Operator (MO) and he committed to complete his investigation in two months,” Ducut said.

“I thank the President and Secretary Coloma for not quickly passing judgment based on the complaint alone and for affording me the right to due process. I will answer the complaint filed against me as soon as I receive a copy from Malacañang,” Ducut said.

“The ERC will not be drawn into any name calling, hasty and emotional statements, as we do not seek publicity nor self-serving positions or aspirations unlike some detractors who are using this issue for self-aggrandizement.”

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