Gatchalian slams ERC for failure to protect consumers from high power rates

Senator Win Gatchalian

MANILA, Philippines–Senator Sherwin Gatchalian has called out the Energy Regulatory Commission (ERC) for failing to efficiently regulate distribution utilities (DUs) and ensure affordable electricity rates for consumers.

During a recent Senate hearing by the Committee on Energy, Gatchalian, who serves as the committee’s vice-chair, criticized the ERC for allowing more than 20 DUs in the country to operate without approved power supply agreements and charge generation rates beyond what is allowed.

The hearing focused on the case of San Fernando Electric Light and Power Company, Inc. (SFELAPCO) in Pampanga, which was recently ordered by the ERC to refund its consumers a total of P654.4 million for excess charges collected from January 2014 to December 2020.

The ERC also imposed a P21.6 million penalty on SFELAPCO for passing on to consumers a generation rate that was not approved by the ERC.

Gatchalian urged the ERC to submit an action plan on how to prevent this from happening again and resolve the situation.

He also asked the Department of Energy (DOE) to review its policy of allowing DUs to maintain indirect membership in the Wholesale Electricity Spot Market (WESM).

Gatchalian pointed out that SFELAPCO’s indirect membership in WESM prevented it from contracting power supply on the spot market, resulting in higher distribution costs for consumers.

“The problem is the indirect membership. I suggest that you review that policy because it can be a loophole moving forward,” Gatchalian said to DOE Assistant Secretary Mario Marasigan during the hearing.

He emphasized that all DUs should strictly follow the rules and regulations to ensure affordable electricity rates for consumers.

Gatchalian also asked the ERC about its Resolution No. 17 series of 2009, which requires all DUs to submit every month their calculations on generation rates, system loss rates, and mandated rate reduction, among others.

“A regulator is supposed to protect consumers,” Gatchalian said. “But if you’re saying our distribution utilities are operating without approved power supply agreements and are charging generation rates beyond what is allowed, how can we be confident of our own regulator?”

“Submit to us an action plan on how to prevent this from happening again moving forward because it doesn’t say good things about our regulator,” he said.

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