Republic of the Philippines - Energy Regulatory Commission

Report by Khenan James Narisma

“A world class and independent electric power industry regulator that equitably
promotes and protects the interests of consumers and other stakeholders, to enable the
delivery of long-term benefits that contribute to sustained economic growth and an
improved quality of life.”

History of ERC
Energy Regulation
Regulation is the control of actions or process by means of rules or law.
Energy Regulation means that energy rates and all the processes that get the electricity
and natural gas to homes and businesses, is controlled by a governing body. They set
the price for electric and natural gas supply and the distribution channels for delivery to
ensure proper competition and to prevent any monopoly.
Brief History of Energy Regulation
The regulation of public services in the Philippines started in 1902 with the
creation of the Coastwise Rate Commission and in 1906, the creation of the Supervising
Railway Expert. The following year the Board of Rate Regulation was also established.
But in 1914, the Philippine Commission, patterning after the Public Service Law
of the State of New Jersey, created the Board of Public Utility Commission. Absorbing
the Coastwise Rate Commission, the Supervising Railway Expert, and the Board of
Rate Regulation and all their functions.
On 1936, the Public Service Commission (PSC) was created and was given the
jurisdiction, supervision, and control over all public services, including the electric power
service
After almost four decades, significant developments in the energy sector
changed the landscape of economic regulation in the country.
1972 –the PSC was abolished and transferred the regulatory and adjudicatory
functions pertaining to the electricity industry and water resources to the Board of Power
and Waterworks (BOPW).
1977 - the Department of Energy (DOE) and Board of Energy (BOE) was
created. The BOE assumed the powers and functions of the Board of Power and
Waterworks over the electric power industry.
1987 - the BOE was reconstituted into the Energy Regulatory Board (ERB) and
which eventually had the power to fix rates in both public and private electric utilities.
 This brings us to the year 2001, the ERB was abolished and replaced by the
current Energy Regulatory Commission, or ERC through the enactment of the EPIRA of
2001.
Electric Power Industry Reform Act (EPIRA) of 2001
“EPIRA of 2001; Republic Act No. 9136 An Act Ordaining Reforms in The
Electric Power Industry, Amending For The Purpose Certain Laws And For Other
Purposes. Be It Enacted By The Senate And House Of Representatives Of The
Philippines In Congress Assembled”
Section 38 of the Electric Power Industry Reform act of 2001, or EPIRA, saw the
creation of the Energy Regulatory Commission as an independent, quasi-judicial
regulatory body. Independent, meaning, it is no longer under the Department of Energy
or any other bodies, and quasi-judicial, it has the right to hold hearings and conduct
investigations into disputed claims and alleged infractions of their imposed regulations.

Vision
A world class and independent electric power industry regulator that equitably
promotes and protects the interests of consumers and other stakeholders, to enable the
delivery of long-term benefits that contribute to sustained economic growth and an
improved quality of life.
Mission
 The ERC is committed to promote free and fair competition and ensure
reasonable rates through the exercise of prudent and equitable judgment.
 The ERC shall provide the industry with ample opportunities to manage risks and
challenges through coordination, consultation and enforcement.
 The ERC shall protect the rights of consumers, balance the interests of all
stakeholders, and nurture the personal and professional aspirations of its
employees.

Powers and Functions (summary)

1. Handle consumer complaints and interests
2. Determine and approve, after hearing, transmission and distribution charges and
retail rates with no discrimination
3. Approve, issue, and review certificates and licenses pertaining to power usage
and supply
4. Enforce the national grid code and Philippine distribution code
5. Enforce regulations for the Wholesale Electricity Spot Market
 6. Ensure that the National power Corporation and distribution utilities function
properly
7. Set Lifeline rates for marginalized End-Users
8. Ensure the qualifications of Suppliers
9. Determine end-users under the Contestable and Captive Markets
10. Attend to stranded debts and contracts
11. Act on applications for cost recovery and return
12. Fix user fees
13. Review power purchase contracts
14. Monitor and penalize abuse on the market
15. Approve terms and conditions of service
16. Determine universal charge for end-users
17. Test and seal electric watt-hour meters
18. Implement the Anti-pilferage of Electricity Law
19. Regulate the prices of piped gas

Objectives
1. To promulgate/approve rules, regulations, guidelines and policies.
2. To enforce rules, regulations including issuance of permits and licenses.
3. To resolve cases (rates and other cases) and disputes.
4. To promote consumer interest.
5. To become a dynamic organization of professional people with the highest
degree of technical competence and integrity.
The objectives of the ERC, in essence, is the accomplishment of their powers and
functions.

Core Values (summarized)

1. Integrity - The ERC’s honesty and fairness
2. Transparency and Accountability - The ERC with clear and accurate information.
3. Excellence - The ERC with precision and efficiency
4. Professionalism - Personnel with utmost competence, skill, and training
5. Teamwork – Fostering collaboration and open communication
6. Public Service - The ERC’s love for country and the public.
Rules of Practice and Procedures

The ERC makes lots of rules and regulations, they approve different rates and
processes for companies, and they make sure that what they impose shall be followed,
and consequences are for those who do not abide, (jump cut to face for emphasis)
they’re like the supreme court for the power industry.

One resolution is the Resolution No. 38. Series of 2006. A Resolution

Promulgating the Energy Regulatory Commission's Rules of Practice and Procedure. In
here, they included 24 rules ranging from general provision, to intervention and
provisional authority, to Filings and court hearings.
The ERC also has rules for different certificates, stated in their Office Order No. 19,
series of 2009, they have guidelines and requirements for getting a certificate of
compliance for companies and facilities, certificate of authority for service providers, and
certificate of registration for wholesale aggregators. As well as licenses for electricity
suppliers.
Organizational Chart
 At the top of the ERC is the commission chair along with four commission
members selected by the Philippine President. The chairman and the commission
members must be experts in any of the fields of energy, law, finance, commerce, and
engineering. Under the chairman and the members are the Internal Audit Division, the
Secretary of Commission, and the Executive Director where most of the bulk of the
ERCs workforce is under, handling 6 different sectors of services. The Finance and
Administrative, Legal, Planning and Public Information, Regulatory Operations, Market
Operations, and Consumer Affairs Services.

The current chairman of the ERC is Hon. Agnes Vicenta S. Torres-Devanadera

and the Executive Director is Atty. Floresinda G. Baldo-Digal.

Their main office is here: Pacific Center Building, Pasig City, Metro Manila.