Rate reset power play uncovered

The absence of a rate reset that should have recomputed the basis for electricity bills and reduced charges was traced in a House public hearing to the term of former Energy Regulatory Commission (ERC) commissioner Alfredo Non in 2016.

Non was infamously head of the ERC when the regulator sat on the third regulatory reset process, which should have updated the distribution rate that had remained unchanged for more than seven years since the lapse of the third regulatory reset process.

Distribution utilities, including Manila Electric Co. (Meralco), the National Grid Corp. of the Philippines (NGCP), and other power utilities, have been at the receiving end of criticism for the regulator’s alleged oversight.

ERC chairperson Monalisa Dimalanta is now cleaning up the mess, saying final evaluations of the rate reset are being held.

Non was among the directors directed to resign by resident Rodrigo Duterte following the death of ERC director Francisco Villa Jr., who committed suicide after exposing alleged corruption within the body during the same year.

“I am demanding that they all resign,” President Duterte said during a press briefing while in Lima, Peru, attending the Asia-Pacific Economic Cooperation (APEC) Summit.

Villa revealed in his suicide note the supposed pressure he faced from ERC officials to approve procurement contracts without proper bidding.

By some strange fate, Non took over from chairman Jose Vicente Salazar after the controversy.

During a legislative inquiry by the House Committee on Good Government and Public Accountability, the former ERC commissioner was questioned about the lack of rate reset proceedings during his tenure, which resulted in lapsed periods for both the transmission grid operator and the country’s largest distribution utility.

Cagayan de Oro 2nd District Rep. Rufus Rodriguez emphasized during the hearing that the ERC — not NGCP or Meralco — should be faulted for the lack of a rate reset, as both entities are regulated and bound by the rules set by the commission.

“The problem here is that the ERC has failed to conduct a timely rate reset. We are barking up the wrong tree if we are faulting the regulated agencies — Meralco and NGCP,” he said.

Rodriguez lamented the criticism being hurled at Meralco, even noting that despite the ERC’s “failure” to conduct a timely rate reset, the utility followed the regulator’s order to refund around P48 billion to customers for the lapsed period.

Non was questioned during the probe about the delay in rate reset proceedings, with emphasis on the issue beginning during his term.

During the inquiry, Non admitted that there was no rate reset for either NGCP or Meralco during his seven-year tenure at the ERC due to an “error” before he entered the collegial body.