Hontiveros welcomes ERC's rejection of NGCP's "patong charges," hopes for immediate refund for consumers soon

Senator Risa Hontiveros has welcomed as "a major step towards lowering our electricity bills" the recent disallowance by the Energy Regulatory Commission (ERC) of the inclusion of P200 billion worth of advertising, entertainment, and other expenses by the National Grid Corporation of the Philippines (NGCP) as "pass on charges" shouldered by consumers.

"Walang ibang dapat patunguhan ang desisyong ito kundi mabilisang refund," said Hontiveros who, since the 18th Congress, has kept on asking the regulators for the disallowance of said expenses and the lowering as well of NGCP's excessive weighted average cost of capital or WACC.

The ERC, as part of its partial decision on NGCP's performance and operations (phase 1), disallowed P200 billion worth of the grid operator's expenses related to "public relations, corporate social responsibility (CSR), representation and entertainment, advertising, donation for COVID-19, charitable contributions, unfinished projects and other miscellaneous expenses." While the NGCP may not be prevented from incurring such expenses, the ERC ruled that these should not be passed on to consumers.

"Masaya tayo na tumugon na ang bagong ERC sa matagal na nating panawagan na alisin ang mga kontrobersyal na "pass-on charges" mula sa gastos ng NGCP na wala namang direktang kinalaman sa kanilang uri ng operasyon sa transmission ng kuryente. Umaasa rin tayo na sa lalong madaling panahon ay magdulot na ito ng refund at pagbaba ng binabayarang monthly power bill sa bawat kabahayan, lalo na kung masasaklaw ng kahalintulad na desisyon ang kaso ng mga distribution utilities na parehong nagpasa ng katulad na mga charges sa mga konsyumer," Hontiveros said.

The senator said it's time to put a stop to power utilities' "palusot" and "tongpats" type of charges dressed as PR, CSR and charity works, which costs they eventually recoup from the consumers.

"Can you imagine that COVID donations and entertainment expenses ay irerekober sa bulsa ng taumbayan?" Hontiveros stressed.

Hontiveros hopes that this ERC disallowance establishes a precedent across all power utilities under the ERC's jurisdiction. Similar expenses incurred by private distribution utilities should also now be disallowed from being recovered against paying consumers.

"Sana ay mapaaga pa ng ERC ang final determination ng rates sa 4th RP para makahabol pa ang refund sa ating Noche Buena," Hontiveros said.

Furthermore, Hontiveros urges the ERC to look into the possibility of lowering further the 10.7% WACC it adopted from the computation of its independent consultant for transmission (Canlas) as the consultant for distribution (Neri) came out with 8.27 WACC for big DUs and 10.07% for small DUs.

"Nabanggit na rin ng ERC sa maraming hearings na ang WACC ng Transmission Utility ay mas mababa kumpara sa WACC ng Distribution Utilities dahil ang business risks ng transmission ay mas mababa kaysa business risks ng distribution. Dagdag pa, napansin din ng mga eksperto na nakausap ko na sa Canlas Report na pinanggalingan ng 10.7% ay predicted values ng WACC parameters ang ginamit gayong ang 4th RP ay nangyari na (2016-2022), therefore historical values na dapat ang pinagbasehan. Kaya't ang nangyari ay actual at historical values ang ginamit ng ERC sa reset ng OPEX, pero sa cost on capital ay predicted pa rin, dahilan para umabot sa 67% ang profit ng NGCP," explained Hontiveros.

"Umaasa ako na may pagkakataon pa para maituwid ito nang sa gayon ay sa pagkakataong ito, ang mai-maximize naman natin ay refund para sa konsyumer, hindi ang labis-labis na tubo ng mga utilities," concluded Hontiveros.