Press Release
March 25, 2023

Gatchalian assails ERC for failure to regulate DUs; urges DOE to review policies

Senator Win Gatchalian assailed the Energy Regulatory Commission (ERC) for its failure to efficiently regulate distribution utilities (DUs) and ensure affordability of electricity rates, to the detriment of consumers.

"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? Submit to us an action plan on how to prevent this from happening again moving forward because it doesn't say good things about our regulator," Gatchalian told ERC officials at a recent Senate hearing conducted by the Committee on Energy.

The committee, for which Gatchalian serves as the vice-chair, tackled the case of San Fernando Electric Light and Power Company, Inc. (SFELAPCO) in Pampanga, which was recently ordered by the ERC to pay its consumers a P654.4-million refund for excess charges collected from January 2014 to December 2020. The ERC also imposed a P21.6 million penalty on SFELAPCO for passing on to consumers a generation rate which has not been approved by the ERC.

During the hearing, it was revealed that there are more than 20 DUs in the country operating without approved PSAs, prompting Gatchalian to call on ERC to resolve the situation and submit an appropriate action plan.

"Paano nakalagpas ito sa inyo?" Gatchalian asked the ERC, in reference to its Resolution No. 17 series of 2009 which requires all DUs to submit every month their calculations on generation rates, system loss rates, and mandated rate reduction, among others.

At the same hearing, Gatchalian asked the Department of Energy (DOE) to review its policy of allowing DUs to maintain indirect membership to the Wholesale Electricity Spot Market (WESM). In the case of SFELAPCO, its indirect membership in WESM prevented it from contracting power supply on the spot market which resulted in higher distribution costs to the detriment of 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 DOE Assistant Secretary Mario Marasigan.

Gatchalian emphasized that the indirect WESM membership also gave SFELAPCO a reason 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," said Gatchalian, noting that all DUs should be reminded that they should strictly follow the rules because in this case it was SFELAPCO that was remiss in its responsibility.


Gatchalian binatikos ang ERC sa 'di maayos na pag-regulate sa DUs; hinimok ang DOE na suriin ang mga polisiya

Binatikos ni Senador Win Gatchalian ang Energy Regulatory Commission (ERC) dahil sa kabiguan nitong ma-regulate nang maayos ang mga distribution utilities (DUs) at matiyak na abot-kaya ang singil sa kuryente.

"Dapat pinoprotektahan ng regulator ang mga mamimili ngunit kung sinasabing ang ating mga distribution utilities ay tumatakbo nang walang naaprubahang power supply agreement o PSAs at naniningil na lagpas sa pinapayagang generation rate, paano pa tayo magtitiwala sa sarili nating regulator?" tanong ni Gatchalian sa mga opisyal ng ERC sa isang pagdinig sa Senado, sabay sabing kailangang magsumite ito ng isang action plan para maiwasan na ang ganitong pangyayari dahil hindi raw ito magandang pangitain para sa isang regulator.

Ang pahayag ni Gatchalian ay kaugnay ng isyung dininig ng Senate Committee on Energy, kung saan siya ay nagsisilbing vice chairperson, hinggil sa kaso ng San Fernando Electric Light and Power Company, Inc. (SFELAPCO) sa Pampanga, na kamakailan lang ay inutusan ng ERC na magbayad ng P654.4-milyon na refund sa mga residente ng San Fernando para sa mga labis na singil na nakolekta mula Enero 2014 hanggang Disyembre. Nagpataw din ang ERC ng P21.6 milyon na parusa sa SFELAPCO dahil sa ipinasa nito sa mga consumer na generation rate na hindi pa naaprubahan ng ERC.

Sa naturang pagdinig, nabatid na mayroong higit sa 20 DUs sa bansa ang nag-ooperate nang walang naaprubahang PSA, na nag-udyok kay Gatchalian na tawagin ang atensyon ng ERC upang lutasin ang sitwasyon at magsumite ng naaangkop na action plan.

"Paano nakalagpas ito sa inyo?" tanong ni Gatchalian sa mga taga ERC, kaugnay ng hindi pagsunod ng ilang mga DU sa resolusyon mismo ng ERC (Resolution No. 17 series of 2009) na nag-aatas sa lahat ng DU na magsumite kada buwan ng kanilang mga kalkulasyon sa generation rates, system loss rates, at mandated rate reduction, bukod sa iba pa.

Sa parehong pagdinig, hiniling din ni Gatchalian sa Department of Energy (DOE) na suriin ang patakaran nito na nagbibigay pahintulot sa mga DU na manatiling "indirect member" ng Wholesale Electricity Spot Market (WESM). Sa kaso ng SFELAPCO, ang hindi direktang pagiging miyembro nito sa WESM ang siyang naging hadlang sa pagkontrata ng suplay ng kuryente sa spot market na nagresulta sa mas mataas na singil ng kuryente para sa mga taga San Fernando, Pampanga.

"Dapat masuri ng DOE ang polisiyang ito dahil isa itong loophole sa proseso," ani Gatchalian kay DOE Assistant Secretary Mario Marasigan.

Binigyang-diin ni Gatchalian na ang indirect WESM membership ay nagbigay din sa SFELAPCO ng dahilan para humingi ng exemption sa Competitive Selection Process (CSP). "Kayo ang nagtali sa sarili nyong kamay dahil kung hindi nyo nabigyan ang SFELAPCO ng exemption sa pagsumite ng CSP, magbabrownout doon," sabi ni Gatchalian, na nagpaalala na dapat lahat ng DU ay mahigpit na sumusunod sa mga alituntunin dahil sa kasong ito ay ang SFELAPCO ang nagpabaya sa responsibilidad nito.

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