Impaired operations at the Energy Regulatory Commission (ERC) resulting from the suspension of a key official leave a number of electric cooperatives exposed to higher power rates obtained at the Wholesale Electricity Spot Market (WESM).
According to suspended ERC chair Monalisa Dimalanta, at least 23 electric cooperatives (ECs) in the Visayas stand to incur potentially higher power rates as the industry is forced to obtain its requirements from the Wholesale Electricity Spot Market (WESM).
This happens because the ERC without its chairman cannot discharge its function as arbiter of prices under contracts obtained from the WESM.
Dimalanta recently told a forum hosted by the Kamuning Bakery and Cafe in Quezon City the ERC needs a functioning chairman to rule only when transactions involve power supply agreements (PSAs) and not obligations obtained at the electricity market.
Dimalanta said more than half of electric cooperatives in the Visayas draw their power from the WESM where rates are determined solely by market forces, unlike those drawn under PSAs whose terms are negotiable.
The suspended official also said the grounds for her suspension is moot as the ERC already decided the matter raised in the complaint that led to her suspension.
The Ombudsman has suspended Dimalanta for six months for alleged grave misconduct, abuse of authority and conduct prejudicial to public service on the strength of a complaint filed by consumer group Nasecore alleging delays in the rate reset of the Manila Electric Co. (Meralco).
Dimalanta has dismissed claims of ERC inaction given the regulator passed judgment on the rate application days before.
Dimalanta said the ERC already took action on 21 August 2024 before the Ombudsman issued an order dated 27 August 2024.
“On August 21, the Commission already voted 3-2, and I was part of the two that dissented, along with Commissioner (Catherine) Maceda. Our dissent vote was that there needs to be a proper reset for the fifth regulatory period, which is the 2022 to 2026 period of Meralco,” Dimalanta said.
“My point was it is the job of the regulator to do the reset. There hasn’t been a reset in the last 10 years, so why should we let go of our job to reset for a period that is yet to lapse,” Dimalanta said.
For its part, Meralco said it has yet to receive a copy of the decision preventing adjustments to the distribution rate until 30 June 2026.
“In compliance with the governing rules issued by the ERC in December 2021, Meralco’s application for the distribution rate reset, which sought an adjustment in our tariff from P1.35 per kilowatt hour (kWh) to P1.57 per kWh, was filed in March 2022. Based on ERC rules, which require that the rate application of distribution utilities must be based on forecast of their annual revenue requirements in the next four years, the 5th RP application of Meralco should have been decided by ERC before the start of the 5RP on 1 July 2022,” Meralco said in a statement.
