Non-surprise of the week: ERC not doing its job, says COA

Ben D. Kritz

Ben D. Kritz

In news that came as a surprise to absolutely no one, the Commission on Audit (COA) released an unfavorable report about the Energy Regulatory Commission (ERC) earlier this week, concluding that the agency failed to carry out some of its key responsibilities while taking a rather broad view of the definition of “accounting.”

At the ERC, accounting apparently includes providing high-end electronic gadgets for its staff, racking up excessive travel expenses, and failing to properly record and dispose of several million pesos’ worth of budget items.

COA It is a sad indictment of the current state of affairs in this country that an audit report finding that a government agency misused or mishandled “only” about P25 million actually does not sound that bad. Compared with other agencies like the DSWD or the Department of Agriculture, whose COA reports mention amounts in the billions, the ERC only appears to be a little sloppy.

In a normal world, though, the head of an agency that purchased expensive laptops, iPads, and cell phones for employees (including several drivers, the COA report notes) and spent P2.6 million of a nearly P10 million budget intended for public “Gender and Development” programs on in-house activities would have gotten a pink slip along with her copy of the audit report. That is particularly so when the head of the agency in question is under indictment for embezzling public funds as a Congressional representative in connection with the Priority Development Assistance Fund (PDAF) or “pork barrel” scandal, and especially when the agency she oversees has been chastised by the COA for not collecting some P10 million in fees owed by distribution utilities, and not enforcing a mandate electric meter testing program for 125 out of 139 electricity distributors across the country.

Current ERC Chairperson Zenaida Cruz-Ducut was charged, along with scam queen Janet Lim Napoles and dozens of former and current political figures, with participation in the P10 billion “pork barrel” scandal (Ducut is accused of taking a 5 percent cut from every PDAF project she delivered to Napoles) while she was still in Congress, representing a district in Pampanga. And in December of last year, Ducut faced a virtual lynch mob of enraged consumers and businesses for giving nodding approval to Meralco’s obnoxious attempt to pass along a P4.15/kWh rate increase to customers on behalf of its generation sector partners, an increase that was quickly blocked by the Supreme Court, and then later found to be nothing more than a case of brazen price-fixing in the electricity market; Ducut responded to the uproar by complaining about the stress of being “personally attacked” in the media, and by stubbornly refusing to resign from her position.

Not quitting her job despite having lost any shred of public credibility she may have had in the first place is Ducut’s prerogative, it is true; those who are annoyed by her exercising it might be better off directing their ire toward the one person who would have the authority to compel her to leave, President B.S. Aquino 3rd. But Aquino is incapable of recognizing non-performing assets (some of my more misanthropic correspondents have suggested that the weirdly-similar physical appearance of several of those might have something to do with it), and refuses to listen when one is identified for him, so the likelihood that Ducut would be replaced by someone more capable is slim; as it is, the ERC board already has one vacant seat, so anyone’s departure at this point would hamstring the already-compromised agency.

Nonetheless, one would think that the chairperson, whose reputation has already been rendered dubious and who has already publicly clarified she was keenly aware of the impact on her self-image controversies surrounding her agency were having during the rate hike scandal, would be sensitive to the perception any misstep by the ERC would have, and would exert greater effort to avoid being caught out by the kind of stupid self-serving decisions revealed in the COA report.

But if one would think that, one would not be Zenaida Cruz-Ducut, who has an explanation for everything. Through the agency’s spokesperson, the purchase of gadgets deemed “excessive” by the COA (one director received a total of four laptops and two iPads in a six-year period) was explained as necessary to allow employees “to do multitasking on the Web,” to overcome “system compatibility issues,” and to “boost geometrical employees’ productivity.”

Maybe I’m getting old, or maybe I just went to the wrong schools, but I have no idea what a “geometrical employee” is.

On the matter of not having ERC vehicles (all 22 of them, according to the COA report) marked “For Official Use Only” as mandated by law, the spokesperson explained that the vehicles had to be unmarked to be able to conduct surprise inspections of distribution utilities and electric cooperatives. “If the name of the agency will be written on the sides of the vehicle, they will be directly sending the message that they are proceeding to the area, which will defeat the purpose of the trip,” the spokesperson said. Also, there is apparently a security issue involved, as the agency’s building was once “sprayed with bullets,” the spokesperson pointed out.

And on the most damning finding of the COA report, the ERC’s non-enforcement of customer meter testing for 90 percent of the distributors who are required to carry that out at least every two years, the ERC found that the excuses that the testing was “too expensive,” or more time was needed to carry out the testing were “meritorious,” and took no further action. In some cases, the ERC said, it was cheaper to replace two-year-old electric meters instead of testing them, so some distribution utilities had opted to do that, “some” in this case meaning exactly 9 of the 139 distributors nationwide.

The issue of meter testing is apparently not a small matter. According to a former Meralco technician, a mechanical electric meter—the most common kind, although bigger utilities like Meralco and some large cooperatives are steadily replacing them with more reliable digital meters—actually needs to be calibrated frequently in order to accurately record electric usage. “For one customer, it probably won’t be off by much, but if every meter is off by a little bit and you multiply that by how many hundreds of thousands of meters being used—well, you can see the problem,” he said.

With electricity supply and high power rates at the forefront of public attention—and often being cited as Reason Number One why business investment and growth in the Philippines is stymied—having the regulatory agency being tagged for sloppy work and improper financial management just adds insult to injury. Never mind that the COA’s findings about the ERC are relatively mild compared with some other agencies; the amount of misbehavior that should be tolerated for any agency should be zero, particularly for one that has such a critical role in the country’s current power crisis. That the current leadership continues to tolerate it is an affront to the entire country.


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  1. anastacio mabini on

    why are you wonder tinggnan nyo un pinakapuno un pinaka ama pangisi ngisi lang nasa pinakamagandang puesto isang paswit lang nya gagalaw ang mga tuta nya syempre un mga tagasunod gagaya rin di ba. lets face the reality hanggang sipinoy ang nasa pwesto walang tayo makakamit na maganda.

  2. jose hernani m. parco on

    how true is it that the ERC collects a mandatory fee from all local electric coop through the “Reinvestment Fund for Sustainable Capital Expenditure (PhP/kWh)? as stipulated in the monthly bill?! ano ba ‘to lahat na lang ng mga magnanakaw na ‘to ay sa taong bayan naka-charge? and this government does nothing but tolerates it? and how come this dukut (what a name) so appropriate as it is synonymous with “dikit” in Tagalog ay malakas ang kapit at hindi matitinag sa puwesto kahit garapal na komokotong? ano ba? talagang ganito na lang tayo? seems like wala nang pagasa ang bayang ‘to! abandon all hope……

  3. Dominador D. Canastra on

    “That the current leadership continues to tolerate it is an affront to the entire country” is just one more case of criminal negligence that the Aquino presidency and President Aquino himself are guilty of.