The ERC controversy, round 2

Ben D. Kritz

Ben D. Kritz

WHILE everyone was distracted with this week’s circus in the Senate and House committee hearings, there were some developments in the nascent controversy over the Energy Regulatory Commission (ERC), and as impolite as it may be for me to actually point it out given the prevailing public mood, these probably have much broader implications than whether Sen. Leila de Lima is a crook or not, and are worth a closer look
On his arrival from Peru on Wednesday, President Rodrigo Duterte doubled down on his threat to remove the current officials of the Energy Regulatory Commission (ERC), promising again to defund the agency if the commissioners in particular—who serve fixed terms—continue to refuse to resign. On Thursday, the activist group Alyansa Para sa Bagong Pilipinas (ABP) filed a complaint at the Ombudsman’s office for violation of the Anti-Graft and Corrupt Practices Act. In the meantime, the National Bureau of Investigation (NBI) is investigating the death by apparent suicide of ERC Director Francisco Villa Jr.; this investigation presumably includes an inquiry into the allegations made by Villa before his death of what would amount to a violation of government procurement rules in contracts awarded by the agency.

Not much about the substance of Villa’s complaint about ERC Chairman Jose Salazar has been disclosed so far, but it apparently involved a P300,000 contract for an “AVP project.” As I pointed out in my column on Thursday (“Duterte crosses the line with threats against ERC”), Villa’s allegations are about an issue different from the regulatory performance of the ERC, which is the subject of the complaint filed with the Ombudsman.

The Villa issue is rather straightforward, and letting the NBI do what they’re supposed to be good at and investigate that with the goal of determining whether or not there is sufficient evidence for the Ombudsman to pursue a case against Salazar and others is the proper course of action.

However, the impression the government has given everyone is that investigation didn’t begin until Duterte aired his own complaints about the ERC. If that is true, then there should be hard questions asked about why that is so (Villa died on November 9); if that is not the case, then Duterte is simply stirring the pot to call attention to himself, which should encourage questions about what he is actually accomplishing.

Duterte’s impatience, however, may be justified in some ways. The case filed by ABP alleges that the ERC illegally extended the implementation date of the Competitive Selection Process (CSP) for power supply agreements (it was originally supposed to take effect in November last year, but was postponed until April 30 of this year), in order to allow seven “midnight deals” for power supply between producers and distribution giant Meralco to be signed without competitive bidding.

The complainants may have a point. Meralco has been aggressively opposed to the CSP since its inception sometime in 2012, and even went to court to delay its implementation, with that ruling being overturned by the Supreme Court early last month. But, there is no clear violation on the part of the ERC commissioners of the terms of the regulation or the laws behind it. The decisions they made that extended the deadline were judgment calls on their part, and most of the so-called “midnight deals” took place after Meralco filed for and was granted an injunction against CSP implementation by a Pasig Regional Trial Court. In other words, the “illegal” deals were possible not necessarily because of ERC’s action, but because of Meralco’s—and that action was properly dealt with by the Supreme Court last month.

Of course, there is nothing to stop anyone from questioning the ERC’s judgment, but the proper place to have that debate, ironically, is in the legislature, which is not an encouraging thought in light of how most legislative investigations accomplish little but to create some mildly titillating media content.

The first question that needs to be answered is whether the current ERC (Chairman Salazar, and Commissioners Ina Asirit, Alfredo Non, Gloria Yap-Taruc, and Geronimo Sta. Ana) actually favored Meralco and its associates; proving that means presenting a convincing argument that there were alternative decisions they could and should have made under the same set of rules and guidelines.

Then, whether that is the case or whether it is simply a matter of a set of decisions that are publicly distasteful in spite of being technically legitimate, the legal framework—of the CSP itself, the Epira law and other laws or directives it is based on, and the laws and regulations that provide for and define the work of the ERC—has to be examined in order to determine how it can be appropriately improved to prevent decisions that apparently favor certain companies.

Whether the Senate Energy Committee—its Chairman Win Gatchalian has called for hearings—can or wants to examine the issue in that sort of depth (it probably won’t, after all, make for very good TV viewing) is something we will have to wait for to find out. Unfortunately, the ABP’s filing of a well-meaning but weak complaint at the Ombudsman will, if things go as they usually do, prevent a practical inquiry. And no less so than when he first said it on Monday, so will Duterte’s threat to simply railroad the current commission out of office.


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  1. It is exactly in the ERC’s judgment call where they abused their discretion–illegally favored a private party, and disadvantaged the consumers. ERC violated its mandate to protect consumers. ERC was not ordered by the court to extend the Competitive Selection Process (CSP) implementation. Meralco only signed the contracts on April 26, more than five months after the original deadline.For a better appreciation of our complaint, I am sendng you a copy for reference.

  2. The common folks are suffering from high electricity costs because of the squabbles among the oligarchs running the big corporations and the government/GOCCs. They should just resign as the lamb already sacrificed his life to expose their bad deeds. Or better yet cut their budget and dissolve that commission.

    This is how simple it is. No one wants to make this a rich vs poor thingy. But then again, the oligarchs have all the time and money to engage themselves into such squabbles. The poor does not have that luxury.

    To cite a separate but similar example at a bigger scale… The Aquino admin had squabbles with China. It seems the previous administration was leaning towards US hegemony. The common fisherman simply said: “To hell with that territorial thing. I just need my daily catch to survive. On our own, we do not even have a navy to protect that area.”

    See my point why all these high-level squabbles are useless? They resign or we dissolve that commission.