Press Release
October 23, 2019

Gatchalian prods ERC over regulatory reset delays

Senator Win Gatchalian has urged the Energy Regulatory Commission (ERC) to stick to its commitments on the final determination of the National Grid Corporation of the Philippines' (NGCP) fourth regulatory period.

During the deliberation of the ERC's proposed ₱954.944-million budget for 2020, Gatchalian grilled ERC chairperson and CEO Agnes Devanadera on the delayed regulatory reset, as he scrutinized the agency's request for a ₱122 million regulatory reset reconsideration.

Gatchalian, chair of both the Senate Committee on Energy and Senate Committee on Finance Subcommittee E, again reminded Devanadera that power consumers are at the losing end as they are being overcharged by as much as ₱45 billion due to the regulatory reset delays.

"We had one hearing on the reset, I think it was last year. In that hearing, it was disclosed by Transco that because of the delay in reset, it's costing the consumers close to ₱45 billion. During that time, we were given some schedules that ERC would follow in order to complete the reset, both for transmission and the utilities," Gatchalian pointed out.

"So may we be enlightened on the timing of this reset? When the reset will happen? And what will it take to have that reset to happen?" he pressed.

Responding to Gatchalian's queries, Devanadera assured the Senate finance subcommittee that they were still on track in implementing the regulatory reset, albeit with revised timeline. She said expected the whole process to be completed by the end of 2021.

Devanadera also defended the ERC's request for a ₱122-million regulatory reset reconsideration, saying that the proposed budget will go to professional or consultancy services. She asserted that the cost of the regulation should be shouldered by government and should not be passed on to the consumers.

"As we have shown, the number of personnel in ERC is too lean. And therefore, going through the regulatory reset will require consultants. It used to be that some amount for the consultancies are being provided by the regulated agencies," the ERC chairman explained.

The lawmaker from Valenzuela, however, believes that timetable of two years that the ERC set for the completion of the regulatory reset is too long, especially given the budget that the agency is requesting to be allocated for the program.

Gatchalian appealed to Devanadera to shorten the time frame of the regulatory reset, saying that it has already been delayed for years.

In reply, the ERC chairperson gave her assurance that the commission will work hard to finish the regulatory reset by the end of 2020 instead of their original timetable of 2021.

"I think it's a no-brainer that ₱122 million will go super far and our consumers will get some form of reprieve, hopefully, based on your audit of the assets. We will work very hard to source that ₱122 million because we want to see the ₱45 billion in return," Gatchalian said.

"I think it's really due to the consumers that we shorten this as much as possible so we can refund that amount, if ever, to our consumers," he added.

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