ERC failed to protect consumers, says COA

No periodic testing of electric meters
/ 02:09 AM September 08, 2014

The Commission on Audit said the Energy Regulatory Commission, chaired by former Pampanga Rep. Zenaida Ducut (inset), failed to protect consumers, while it lavished its officers with MacBooks and iPads and deployed government vehicles without “For Official Use Only” markings. INQUIRER FILE PHOTOS

MANILA, Philippines–The Energy Regulatory Commission (ERC), chaired by former Pampanga Rep. Zenaida Ducut, failed to protect consumers, while it lavished its officers with MacBooks and iPads and deployed government vehicles without “For Official Use Only” markings, the Commission on Audit (COA) said.

The COA noted how the ERC went soft on power distributors in checking whether they were cheating consumers with the use of faulty electric meters and how it was unable to justify the provision of multiple laptops and tablets to its officers last year.


Ducut has refused to heed calls for her resignation even after she was charged along with scores of former and current government officials in the P10-billion pork barrel scam for allegedly taking a 5-percent commission for every pork barrel project she brought to accused pork plunderer Janet Lim-Napoles.

Lawmakers have likewise asked for Ducut’s head for approving Manila Electric Co.’s huge rate increase of P4.15 per kilowatt-hour in December last year amid the Department of Energy’s suspicion of collusion among power generators to make a killing from the monthlong shutdown of the Malampaya gas pipeline.


The Inquirer tried to contact Ducut but she was not available for comment.

In its 2013 ERC annual audit report released on Aug. 29, the COA said the ERC had failed to throw the book at 125 of 139 distribution utilities (DUs) in the country that failed to comply with the mandatory testing of their electric meters.

“The low compliance by the DUs puts the consumers at a disadvantage as they are not assured if their meter readings are accurate. But despite this situation, the commission had not been aggressive in following up with the DUs their action to execute the immediate meter testing nor made a move to impose sanctions on those [not complying],” the COA said.

Low compliance rate

From July 2012 (when the mandatory testing started) to December 2013, the ERC reported that only 14—or just 10.07 percent of the 139 DUs nationwide—had their in-service meters retested every two years.

The ERC said that of the handful of distributors that complied, only five had actually done periodic testing while nine decided to replace their two-year-old meters with new ones.

In explaining their low compliance rate, the DUs told the ERC that they preferred to buy new meters or that they could not afford to buy the testing equipment (so they hired third-party testers) or asked for a time extension.


The ERC did not fine the erring DUs as it found their reasons or comments “meritorious.”

The regulatory body also argued that the meters were not tested because most of them were less than two years old; some meters were tested but did not have stickers pending the DU’s final report; some meters were replaced; and the DUs were not ready to implement the testing program.

The COA, however, maintained that the ERC should strictly enforce its policies on the conduct of periodic in-service meter testing and impose administrative sanctions on the DUs that continuously failed to comply.

Laptops, tablets

The audit agency also branded as “excessive and unnecessary expenditures” the grant of the latest laptops and tablets to 27 ERC officers and employees and cell phones (worth P8,500 each) to five ERC drivers.

The COA has ordered the ERC officials to just keep one gadget and return all laptops or tablets while the drivers were asked to pay for the mobile phones or return them.

“Henceforth, [the ERC should] determine the real need before purchasing and issuing additional computers or other IT equipment, and observe prudence in the disbursement of government funds,” it said.

ERC officers

Among the top ERC officers who each received roughly P250,000 worth of  high-tech freebies from 2009 to 2013 were:

— Executive Director Francis Saturnino C. Juan (Lenovo ThinkPad, Apple MacBook Air 2 and iPad from 2010 to 2012)

— Director Isabel Joseph P. Tomas II (MacBook Pro, Lenovo ThinkPad and iPad from 2009 to 2011)

— Director Noel J. Salvanera (MacBook, HP EliteBook and iPad 64GB  from 2009 to 2011)

— Director Corazon C. Gines (Samsung laptop, MacBook Air, HP EliteBook and iPad from 2009 to 2012)

— Director Floresinda Digal (Samsung laptop, MacBook Air, HP laptop, Lenovo laptop and two iPads from 2008 to 2014)

“Such number of equipment with similar functions issued to an individual is excessive,” said the COA, which noted that all of the units were functional upon inspection last year, raising questions about the need to buy new and similar units.


The ERC explained that it needed the high-end gadgets to keep up with changing technology and allow its personnel to do multitasking on the Web as well as deal with “system compatibility issues” and boost “geometrical employees’ productivity.”

On the mobile phone purchases, the ERC said this was the fastest and most economical way to contact its drivers.

“Although we see the need to update on IT equipment to catch up with the fast technology innovations, we find the excessive units of similar function equipment issued to one employee not in keeping with the economy measures in government spending,” the COA said.

Unmarked cars

The audit agency also noted that ERC officials were using unmarked government vehicles and were unable to submit vouchers to support fuel purchases of P1.23 million last year.

“All of the 22 ERC vehicles were not marked ‘For Official Use Only’ nor the name of the agency written on the sides of the motor vehicles. Payment of gasoline expenses was not supported with approved requisition and issue voucher (RIV) or its equivalent,” the COA said.

“The absence of RIV and fuel consumption and travel reports rendered difficult the monitoring of travels and the related gasoline usage.

Also, the nonmarking of the agency vehicles could lead to the use of the same for “personal/unauthorized purposes.”

Unscheduled inspections

In its reply, the ERC management said it had to keep the vehicles unmarked for its unscheduled inspections of DUs and cooperatives.

“If the name of the agency will be written on the sides of the vehicle, they will be directly sending the message that they are proceeding to the area, which will defeat the purpose of the trip.

“Likewise, the commission is also considering the safety and security of its officers and employees. As what happened in the past, the ERC building was sprayed with bullets,” the ERC said.

The COA report also noted the ERC’s failure to collect P10.1 million in regulation fees and penalties from DUs and electric cooperatives that have been unpaid for up to five years.


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TAGS: Audit, Commission On Audit (COA), Consumer issues, Energy, Energy Regulatory Commission (ERC), Government offices and Agencies, Philippines, Zenaida Ducut
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