Speaker Alvarez files bill scrapping ERC, proposes formation of Board of Energy

Speaker Alvarez files bill scrapping ERC, proposes formation of Board of Energy

Speaker Pantaleon Alvarez has filed a house bill that will abolish the Energy Regulatory Commission (ERC) following corruption allegations and the suicide of a director over alleged coercion to approve irregular contracts.

“The suspicions raised against the integrity of the ERC, which is primarily entrusted with regulating the country’s electric industry and promoting competition in the market, cannot be ignored,” Alvarez said in House Bill no. 5020.

Alvarez cited the suicide letters left by ERC Director Francisco Jose Villa Jr., which contain allegations on dubious deals and practices within the agency.

“In his suicide note, Villa claimed that his superiors exerted pressure upon his person to approve contracts that disregard the proper regulatory procedures,” Alvarez said.

Under the bill, the ERC will be replaced with the Board of Energy, which will be an attached agency of the Department of Energy. This means the DOE will control and supervise the board.

“This will ensure that the newly created board shall be explicitly within the regulatory arm of the government and specifically, within the direct control and supervision of the President,” Alvarez said.

The Board of Energy will be tasked to perform ERC’s roles. It will be composed of a chairperson and two members appointed by the President based on the recommendation of the Energy Secretary.

To ensure no conflict of interest, the bill prohibits the chairperson and members of the board or any of their relatives within the fourth civil degree, consanguinity or affinity, legitimate or common law, from holding any interest whatsoever in any company or entity engaged in the energy business.

Should they have any role in the energy business, they will be mandated to divest all their interest in the energy sector when they assume office.

The bill also prohibits the appointment to the board of any person who has worked within three years immediately prior to the appointment, or is working in any private firm engaged in the petroleum or electric industry or any other entity whose main business is related to or connected with any such firm.

Alvarez said irregularities in the ERC were brought to light after Villa’s death in November.

His suicide led President Rodrigo Duterte to call for the resignation of all ERC commissioners in order to reform the agency.

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  1. Elmer B. Sambo

    ERC SHOULD BE RETAINED. What is needed is to provide proper control and transparency how ERC operates. Creating a new department just to replace ERC will only shift the same problem but will not address the issue of efficiency, control, transparency and most of all corruption! This new plan to replace ERC is just to facilitate the projects of vested interest of the new group who replaced the vested interest of the past administration. This example will clarify the ERC issue; NGCP Power Transmission Lines – Power transmission line is one of the vital key for power generation projects. ERC have a hand in approving and prioritizing these NGCP transmission projects. As coal fired power plants are built like mushroom in our country today the new issue is now how to send all the power generated from the coal fired power plants to the consumers without the proper transmission line. As these transmission lines cost billions of pesos each ERC is now under pressure which of these projects has to be implemented as now there is a new group with different objectives compared to the past administration. An example is the last administration priority is to upgrade the transmission grid at southern Luzon so as to be able to send the power generated from the new power plants in the area i.e. CWT LNG CCGT power plant in Pagbilao. With the new group the priority is to connect Mindanao to Cebu and eventually to Luzon. The reason for this is the over building of coal fired power plants causing power over supply in the area and the problem is magnified by the cheap power available from hydro plant in Mindanao. Note that all these new transmission line is not cheap and this will add burden to the consumers. Due to limited space I cannot present examples on how ERC can implement proper pricing for electricity, gasoline, diesel etc. which are vital to our economy and to us consumers. My last word of advice is to retain ERC however how it operates should be rationalize to provide proper control, transparency and reduce or eliminate corruption. And most of all let it work as what it is mandated to implement i.e. interest of the consumers!.

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