MANILA – Lawmakers approved a motion calling for an audit on the Energy Regulatory Commission during the lapse period to determine what caused the delays in rate reset process.

During the House Committee on Good Government and Public Accountability hearing on Monday, lawmakers questioned the ERC anew over the absence of a rate reset for the National Grid Corporation of the Philippines (NGCP) and Meralco for over a decade.

READ: ERC to complete rate reset of NGCP by February, Meralco by June

Santa Rosa Rep. Dan Fernandez said the ERC's failure to conduct a rate reset must be investigated to avoid the same issues from recurring.

"Ako ang aking pananaw, they failed us. They failed us because sila ang taga protekta natin. Instead na yung P1.35 na dapat kolektahin sa tao ay mas baba eh hinayaan nila yun without computing it. And disregarding payment to consultants.. Sinabi i-confirm nalang natin proposal ng ating regulated entity," he said. 

"The right recourse for now is to involve the government, especially the COA. I think moving forward, mister chairman, we will be asking our COA na i-audit. Siguro yung third party na ma-involve din po dito," Fernandez added.

Cagayan de Oro Rep. Rufus Rodriguez expressed support for the proposal of Fernandez.

"An audit is certainly called for so that those in the ERC will be held responsible. Also those allegedly regulatory agencies in connivance based on the privilege speech will also be responsible. Therefore, I join the motion to have COA to have an external audit on what has happened in the entire the lapse period and the present," he said. 

Energy Undersecretary Sharon Garin expressed her take on the proposed audit.

"The problems with ERC is not just deliberately delaying. There's also capacity building that's lacking in the ERC, there's also funding that they will lose this year for the possible consultants. And they lack people also. In defense of ERC, that's also cause of delay," she explained. 

"Maybe there's also possible assessment on the capacity of the ERC as a commission or as a body. Kasi we are giving them deadlines and responsibilities without giving them the resources to deliver them on time. Maybe the rules also need to changed," Garin added.

WHY THERE WAS NO RATE RESET

Earlier in the hearing, former ERC Commissioner Alfredo Non was asked about the absence of a rate reset during his seven years with the commission.

"After the third regulatory going to the fourth regulatory reset, nagkaroon ng problema niyan. Merong kasong sinampa ang NASECORE sa Supreme Court regarding the third regulatory period. From the time it was sent to the Supreme Court, the ERC could not do its regular work because of the sub judice principle… On the regulatory reset, it was just moving, waiting for the decision ng Supreme Court," he said. 

"As far as reset is concerned, it is a very complicated process. There are issues that need to be resolved," Non added.

ERC Commissioner Catherine Maceda noted the delays started in the last quarter of 2016, when Meralco failed to publish the draft rules for the fourth regulatory period.

Meralco said it had issues with the draft rules, which it claimed it raised with ERC.

"Totoo po na may nilabas ang sulat na ERC through then OIC commissioner Non directing Meralco, not only Meralco but all distribution utilities to publish the rules of the fourth RP. But sinabi po namin noon na may issues kami with the fourth RP…. We raised those issues to the ERC and we were waiting for them to resolve it. Nagfile po kami ng sulat sa ERC to set a meeting para mapagusapan namin yung issues," Meralco Senior Vice President and Regulatory Management Office Head Jose Valles responded.

The Meralco official said the letter was acknowledged by Non but the meeting did not take place. Valles added, they did not hear back from 2017 until 2022 on the rate reset.

Maceda refuted this claim by the utility on the lack of communication.

"In 2019, they even had a meeting in Baguio together with Engr. Alvin and they discussed about the reset and they discussed the commission's specific plans I just wanted to put this on record because I don't want ERC to be pictured as if we slept on our jobs... Let's be careful with citing dates. Don't put people in a bad light when they're not supposed to be put in a bad light," Maceda said. 

"Just for the record, we are not trying to put ERC in a bad light. We are stating the facts. Based on the records we have, there has been no official communication from the ERC directing us to do a reset on the lapse period," Valles responded.

The former ERC official cited "internal issues" that affected their schedules.

"We completed the amended rules for distribution rates sometime in 2016. But before it can be put into implementation, it has to be published for purposes of to be in effect. The order then was Meralco to have it published but it was not published until nagkaroon ng bagong regulatory period in 2019. But before that in 2016, the ERC went into an internal problem," Non said. 

"Nagkaroon ng investigations within the ERC and that really threw off all the schedules. We have been called into investigations in NBI, congress, Senate. There was a time all the commissioners were suspended. That really disrupted all the schedules in 2016 until Chairman Agnes Devanadera was appointed in 2017…. The disruption in 2016 was really a big loss because most of the time we could not do anything. The reset itself for the fourth period was started but it was not completed," he explained.

ERC Chairperson Monalisa Dimalanta welcomed the lawmakers' call for an audit.

"Bukas naman kami sa pag-audit ng COA or kanina nabanggit a third party auditor. Para malaman natin once and for all bakit ba hindi nakapagreset since 2011, 2012 kung kailan nagsimula ang third regulatory period," she told reporters after the hearing.

"I think lahat tayo makikinabang doon sa matututunan natin sa lalabas doon sa pagsusuri na yun. Para huwag na maulit yung pangyayari na ganun na lahat tayo ay agrabyado. Kasi consumers talaga magpapasan," Dimalanta added.

The ERC chief stressed their commitment to conduct a rate reset this year.

"Itong commission na ito seryoso po kami sa reset. Sa past, hindi ko po masagot," Dimalanta said.