When electricity prices move, public reaction is often immediate. Rate increases are felt directly by households and businesses, making power regulation one of the most scrutinized responsibilities in government. In our recent conversation on Power Podcast, Francis Saturnino C. Juan, Chairperson of the Energy Regulatory Commission (ERC), explained why some of the most difficult regulatory decisions are also the most necessary.

For Juan, regulating electricity rates is not about choosing between consumers and investors. It is about ensuring that today’s affordability does not come at the expense of tomorrow’s reliability.

Consumer protection as the starting point

Juan was clear that consumer welfare remains the ERC’s primary mandate. Every petition and application, he said, is evaluated with the impact on end-users in mind.

“Our priority is really consumer welfare,” Juan said, referring to households and businesses that ultimately shoulder electricity costs.

At the same time, he cautioned that consumer protection cannot be reduced to keeping prices low at all costs. Electricity is a service that depends on continuous supply, infrastructure upkeep, and system expansion—each of which carries a cost that must be managed responsibly.

Why investment matters to long-term affordability

A recurring theme in the discussion was the relationship between investment and price stability. Juan explained that without sufficient investment in generation, transmission, and distribution, supply constraints eventually emerge.

“If you don’t fix the supply and demand continues to increase,” he said, “at some point, the price of electricity will really increase.”

From a regulatory perspective, approving certain investments—even when they have short-term rate implications—is often a preventive measure. Without new capacity or upgraded infrastructure, shortages can push prices higher through the wholesale electricity spot market, exposing consumers to far greater volatility.

Making difficult decisions with long-term consequences

Juan acknowledged that some ERC decisions result in immediate rate impacts, making them unpopular in the short term. However, he stressed that avoiding these decisions can lead to worse outcomes.

“These decisions are very painful, very difficult to make,” he said. “But as a regulator, you know these are the right decisions for consumers in the long run.”

For Juan, the regulator’s responsibility is not to avoid controversy, but to weigh trade-offs carefully—approving only those costs that are justified and aligned with system needs.

Balancing interests without abandoning oversight

Encouraging investment, Juan emphasized, does not mean giving power companies a free hand. The ERC continues to scrutinize applications to ensure costs are reasonable and processes are followed.

He pointed to the importance of competitive selection processes and proper regulatory review as safeguards that protect consumers while giving investors predictability. When projects are competitively bid and rules are followed, regulators can be more confident that approved costs reflect least-cost outcomes.

This balance, Juan said, is essential to sustaining investor confidence while maintaining the ERC’s role as a consumer watchdog.

Explaining regulation to the public

Juan also highlighted the importance of communication and transparency, especially when rate-related decisions are involved. Consumers, he said, deserve to understand why certain approvals are made and how these decisions affect the power system as a whole.

“It needs to be explained,” Juan said, referring to decisions that lead to rate increases. “Because if those investments don’t happen, demand will continue to increase and prices will be even higher.”

By opening commission meetings and explaining regulatory logic, Juan believes the ERC can help bridge the gap between technical decision-making and public understanding.

Regulation as prevention, not reaction

Throughout the conversation, Juan framed the ERC’s role as one of preventing future crises rather than reacting to them. Approving investments today, even at a cost, can help avoid shortages, price spikes, and system instability down the line.

For consumers, the benefits of these decisions may not always be immediately visible. But for the power sector as a whole, they form the foundation of a system that can meet rising demand without sacrificing reliability or fairness.

How should regulators balance short-term electricity costs with the long-term need for reliable power and sustained investment?

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You can catch the full episode on our official Youtube channel.