Ombudsman orders second suspension to ERC commissioners over bill deposits issue


The Office of the Ombudsman ordered the suspension of the the four commissioners of the Energy Regulatory Commission (ERC) due to failure to act on the misuse of bill deposits by distribution utilities (DUs).

Six months after the first suspension order, the Ombudsman found ERC commissioners Alfredo Non, Gloria Victoria Yap-Taruc, Josefina Patricia Asirit, and Geronimo Sta. Ana guilty of simple neglect of duty and was ordered for a three-month suspension from service without pay.

Last December, the Office of the Ombudsman ordered for the suspension ERC commissioners Alfredo Non, Gloria Yap-Taruc, Josefina Patricia Magpale-Asirit and Geronimo Sta. Ana for one year without pay for delaying the conduct of competitive bidding in securing PSAs.

According to the second suspension order, the said four commissioners continuously refrain from strictly implementing rules defining the nature of bill deposits as “mere guarantee in payment of bills”, which must be returned upon termination of the DUs’ service.

The decision also cited the failure of the commissioners in issuing roles and policies, ordering DUs to create a separate escrow account for bill deposits to avoid incorporating the said amount with capital or operational expenses

The suspension order also showed that the ERC commissioners are irresponsible in exercising its mandate of protecting the interest of the electricity consumers, which results in regulatory failure.

Consumer group National Association of Electricity Consumers for Reforms Inc. (NASECORE) welcomed the second decision, citing it as a long overdue justice for the consumers against ERC’s regulatory failure, the group said in a statement.

NASECORE said it filed an earlier complaint against Manila Electric Company (Meralco) and the ERC commissioners for Syndicated Estafa and Grave Misconduct.

Th complaint cited unauthorized use and utilization of consumers’ bill deposits by the DU, the discriminatory fixing of interests by the ERC and, the non-crediting by Meralco of the interests earned by the Bill deposits in favor of the consumers.

However, the complaint was dismissed due to insufficient evidence with the Ombudsman referring to the Commission on Audit (COA) for the conduct of an audit on the bill deposits gathered by Meralco, the consumer group said.

“It is apt to refer to the Commission on Audit (COA) the matter of determining the total amount of BDs (bill deposits) collected by DUs particularly Meralco, the appropriate fixing of rates and the supposed interest earned by such BDs starting the year the same were collected until the present time so as to properly credit such earning in favor of the public consumers – more so, since MERALCO failed to show that it credited yearly interest to the bills of the registered customers,” NASECORE said, quoting the Ombudsman’s reply to its filing.

In a separate statement, Sen. Sherwin Gatchalian called the ERC an embarrassment for being an administrative liability for failing to fulfill their duty to protect the interests of the consumers, citing an urgent need to reform the agency “to restore the institutional integrity of the ERC and rebuild the public confidence in the Commission that has been virtually eliminated by the never-ending list of recent scandals.”

“The ERC was created to safeguard the rights and welfare of power consumers, who would otherwise be defenseless against unfair, anti-competitive, and outright anti-consumer practices of powerful, well-moneyed energy industry players – a perfect example of which is the outrageous misuse of bill deposits by distribution utilities. Unfortunately, instead of standing up for the consumers, the ERC allowed an energy industry titan to appropriate billions of pesos worth of consumer deposits for its own corporate purposes,” he said.

Gatchalian said he is promoting the proposed ERC Governance Act when the Senate resumes in July.

Under the proposed bill, the ERC should hold open meetings when making regulatory decisions, with the chairperson to be stripped of his control over the management of the ERC and the Chief Executive Officer (CEO) will be delegated to the Executive Director, who shall be appointed by the Commission.

Executive sessions will likewise be allowed to “discuss the disciplining or dismissal of complaints or charges brought against a public officer, employee or staff of ERC.”

“As Chairman of the Senate Committee on Energy, I will fast-track the passage of the ERC Governance Act – a pivotal piece of energy legislation which seeks to accomplish the needed reforms by deconcentrating power within the ERC and by compelling the body to be more open and transparent in its decision-making processes,” he said.

In February, the four commissioners were reinstated after the agency received the Court of Appeals’ (CA) issuance of a 60-day temporary restraining order (TRO) on the suspension of the ERC commissioners ordered by the Office of the Ombudsman.

The CA has granted the ERC commissioners’ petition for a preliminary injunction in April.





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