Senator Sherwin Gatchalian asked the Energy Regulatory Commission to submit an action plan to resolve the more than 20 cases of distribution utilities operating without approved power supply agreements.
“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 at a recent hearing conducted by the Senate committee on energy.
“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, co-chair of the Senate energy committee, said.
The committee tackled the case of San Fernando Electric Light and Power Company Inc. in Pampanga which was ordered by the ERC to refund consumers P654.4 million covering the period 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 was not approved by the ERC.
Gatchalian said ERC Resolution No. 17 series of 2009 requires all DUs to submit every month their calculations on generation rates, system loss rates and mandated rate reduction, among others.
He assailed the ERC for failing to efficiently regulate the DUs and ensure affordability of electricity rates to the detriment of consumers.
The senator asked the Department of Energy to review its policy of allowing DUs to maintain indirect membership to the Wholesale Electricity Spot Market, the trading floor of electricity.
SFELAPCO’s 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, Gatchalian said.
“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 said the indirect WESM membership also gave SFELAPCO a reason to ask for an exemption from the competitive selection process.