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Ombudsman suspends all 4 ERC commissioners for one year

/ 04:00 PM December 21, 2017


The Ombudsman has ordered the one-year suspension of all four commissioners of the Energy Regulatory Commission for allowing electric utilities like Manila Electric Company to forgo the bidding of their power supply requirements at the public’s expense.

Commissioners Gloria Victoria Yap-Taruc, Alfredo Non, Josefina Patricia Magpala-Asirit and Geronimo Sta. Ana  were found guilty of conduct prejudicial to the best interest of the service, aggravated by simple misconduct and simple neglect of duty.


Dismissed Chairman Jose Vicente Salazar was likewise found guilty of the administrative offenses. Since President Duterte already removed him from office in October for allegedly manipulating the procurement of small ERC contracts, the Ombudsman required him to pay a fine equivalent to six months’ salary.

As for the criminal aspect, the Ombudsman also found probable cause to charge the five ERC officials with violation of Section 3(e) of the Anti-Graft and Corrupt Practices Act for causing undue injury to the government and giving unwarranted benefits to private parties.

The two resolutions approved on Dec. 11 arose from the Nov. 24, 2016 complaint of Alyansa Para sa Bagong Pilipinas, Inc., that questioned the deferment of the competitive selection process (CSP) rule, which requires electricity distributors to hold competitive bidding for their power to lower consumer rates.

The rule was supposed to take effect in November 6, 2015. But on March 15, 2016, the ERC allowed a 45-day window deferring the CSP rule until April 30, 2016. This allowed 38 firms to procure an aggregate supply of 4,500 megawatts without having to hold a competitive bidding.

Pangilinan-led Meralco – whose Nov. 26, 2015 request for exemption from the CSP rule was originally denied on Dec. 10, 2015 – especially had one last chance to negotiate seven power supply agreements with its sister generating companies for a total supply of 3,551 MW.


Contrary to public interest

The Ombudsman said there was sufficient evidence that ERC “gave unwarranted benefits to Meralco and other companies by exempting them from the coverage of the CSP requirement which was already in effect.”


The officials were faulted for their “gross inexcusable negligence” that allowed the power firms to circumvent government policy and deny consumers of the opportunity to obtain the best price offers and power supply terms.

The deferment of the CSP rule as a “deviation from respondents’ duty to promote public interest,” read the resolutions approved by Deputy Ombudsman for Luzon Gerard Mosquera.

The Ombudsman said the ERC “cannot feign ignorance that Meralco may take advantage of the period” and “cannot deny that Meralco’s [PSAs] are significant and material.”

It added the CSP rule cannot be deferred by “requests for clarification, exception and/or exemption,” especially as industry stakeholders were already heard in extensive consultations as early as February 2013.

The ERC officials claimed the regulator needed time to finalize the guidelines, but the Ombudsman bound it by the November 2015 effectivity date since the officials imposed this while “fully aware” of the supposed issue.

Bayan Muna Party-list Rep. Carlos Isagani Zarate, who filed the House resolution that opened the congressional inquiry into the alleged midnight deals, said the Ombudsman resolution validates the findings of lawmakers that the ERC bent its own rules to accommodate the power firms.

“This just goes to show that indeed the commissioners indeed violated their own rules and showed undue partiality to the Meralco-affiliated generation companies,” Zarate said, adding that he hoped the Supreme Court would soon annul the seven Meralco PSAs because of this development.

Meanwhile, multisectoral alliance Sanlakas, which filed a separate complaint against ERC officials last June 29, said the Ombudsman resolutions “bolster the truth that only collusion between the government and corporations could have allowed for such anti-consumer and anti-environment agreements to prevail.”/je

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TAGS: commissioner, Energy Regulatory Commission, ERC, Ombudsman, suspended
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