Senator Sherwin Gatchalian called out the Energy Regulatory Commission (ERC) for “failing to efficiently regulate the distribution utilities and ensure affordable electricity rates for consumers.”
In a recent Senate hearing by the Committee on Energy, Gatchalian criticized the ERC for allowing more than 20 DUs for operating without approved power supply agreements and charge generation rates beyond what is permitted.
“A regulator is supposed to protect consumers 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?” Gatchalian told ERC officials during the hearing.
The Senate committee discussed the case of San Fernando Electric Light and Power Company Inc. (SFELAPCO) in Pampanga, which was ordered by the ERC to pay its consumers a Php 654.4 million refund for excess charges collected from January 2014 to December 2020.
SFELAPCO was also fined Php 21.6 million for passing on to consumers a generation rate not approved by the ERC.
Gatchalian also asked the Department of Energy (DOE) to review its policy in allowing DUs to maintain indirect membership to the Wholesale Electricity Spot Market (WESM).
In SFELAPCO’s case, its indirect membership in WESM prevented it from contracting power supply in the spot market which resulted in higher distribution costs to consumers in San Fernando, Pampanga.
“The problem is the indirect membership. I suggest that you review that policy because it can be a loophole moving forward,” Gatchalian told Energy assistant secretary Mario Marasigan.
Gatchalian said that the indirect WESM membership of SFELAPCO was a reason for them to ask for an exemption from the competitive selection process (CSP).
“You tied your own hands since if you don’t give SFELAPCO an exemption from CSP, magbabrownout doon,” Gatchalian said.