Probe into ERC’s regulation sought

2 days ago

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A PHILIPPINE senator has filed a resolution to look into the Energy Regulatory Commission’s (ERC) performance-based regulation system of assessing power generation costs only when a project is completed, which is seen to delay cost recovery amid the country’s power issues.

Senate Resolution No. 1238, which Senate President Francis G. Escudero filed on Nov. 21, pushes for an “as spent” method of assessing regulatory costs to ensure a quicker recovery of investments.

The as spent method adds costs as they occur while as the ERC’s existing “as commissioned” regulatory assesses costs only when a project is completed, according to a copy of the resolution.

“The adoption of ‘As Commissioned’ method will entail significant adverse consequences on investment risk, return on capital, regulatory compliance and electricity cost given its uncertainty and the need to cover financial cost,” based on measure.

Energy Undersecretary Sharon S. Garin earlier urged senators to amend the ERC charter to allow price increases without regulatory approval as long as these fall within a set benchmark or bracket.

This would allow the ERC to do away with the cumbersome approval process that power distributors have complained about, she told a Senate energy committee hearing that is looking at changes to the 23-year-old Electric Power Industry Reform Act (EPIRA).

In his third address to Congress, President Ferdinand R. Marcos, Jr. sought a review of EPIRA to address issues hounding the energy sector, particularly high energy prices.

Mr. Escudero said the “as spent” method would be a more balanced and sustainable cost recovery framework and would help the government avoid financial strain or delayed cost recovery.

“The ‘as spent’ method also ensures continuous funding for ongoing projects, stabilizes electricity rates over time, and enhances regulatory transparency, ultimately providing a more predictable and equitable system for the regulated entities and consumers,” the Senate president said. — John Victor D. Ordoñez