The Energy Regulatory Commission (ERC) is inviting stakeholders to comment on its newly released Issues Paper on the valuation of the Regulatory Asset Base (RAB)—a key step in formulating new rules that comply with a Supreme Court directive to ensure fair and least-cost electricity pricing.

The Issues Paper, posted on May 14, 2025, stems from the Supreme Court’s 2019 decision and 2025 resolution in G.R. No. 226443: National Association of Electricity Consumers for Reforms, Inc. (NASECORE) v. ERC, which voided the use of the Optimized Depreciated Replacement Cost (ODRC) method in valuing the RAB of the Manila Electric Company (MERALCO).

In the ruling, the High Court found that the ODRC method was unjustified and ordered the ERC to adopt a valuation approach that would result in electricity prices reflective of actual, reasonable costs. The ERC was also directed to identify which distribution utility (DU) expenses may be passed on to consumers—wholly or partially—in a manner consistent with least-cost principles.

The Commission is now seeking written comments on the Issues Paper until June 5, 2025. Submissions may be emailed to [email protected], with copies furnished to [email protected] (Regulatory Operations Service) and [email protected] (Legal Service).

A public consultation is scheduled for Friday, June 13, 2025, at 9:00 AM and 2:00 PM at the ERC Main Office in Pasig City.

“We encourage all our regulated entities, experts, the academe, and all electricity consumers to actively participate in this exercise,” said ERC Chairperson and CEO Atty. Monalisa C. Dimalanta. “The rules to be crafted will play a critical role in ensuring that only justifiable and fair charges are being recovered in the electricity bills of Filipino consumers, in full compliance with the SC’s decision.”

Dimalanta added that the ERC’s effort is part of a larger regulatory reform agenda, including long-overdue rate resets and enhanced consumer protection mechanisms. The public consultation process is designed to ensure transparency and accountability in the development of utility rate-setting policies.

The release of the Issues Paper is a preliminary step toward rulemaking and is expected to guide deliberations on how future RAB valuations will affect electricity tariffs, capital recovery mechanisms, and return on rate base (RORB) computations.

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