Posted by: empowerconsumers | July 15, 2008

NO! to another politico in ERC

We, members of Empower Consumers, reject the appointment of another politician – former Pampanga Rep. Zenaida  Ducut – as the acting chairperson of the Energy Regulatory Commission (ERC).  An inexperienced chief who has no track record in the fields of regulation and in protecting consumer interests and welfare is not what the complex and ailing power industry needs today.

The ERC is a crucial agency responsible for the direction of the vital power industry and the fate of electricity consumers.  It regulates the whole power industry including penalizing fraud and abuse of market power by power utilities.  It also determines just and reasonable electricity rates and approves, grants, and revokes licenses, permits as well as certificates of compliance of electric industry participants.

In 2006, industrial electricity rates in the Philippines were the highest in Asia while residential rates were the third highest.

We are deeply concerned about serious allegations raised against acting ERC Chairperson Ducut, specifically on her supposed close ties with the Arroyo family as well as her reported links with the other Ducut’s who are with a consortium involved in an anomalous coal-supply contract with the National Power Corporation. If true, these ties may impair justness and prudence in ERC decisions, considering that the First Family and its cronies are now seemingly getting deeply involved in the power industry especially in transmission and generation sectors and attempting to take control of Meralco – the biggest distribution utility in the land – through its ally GSIS President Winston Garcia.

The consumers had suffered enough under the past ERC chairpersons who were politicians like Manuel Sanchez and Rodolfo Albano, Sr. Under their watch, ERC rendered decisions favorable to the power utilities but had adverse impacts on the consumers, especially the poor. They have shown glaring inability to discern the difference between the private interest and the public interest, and the lack of will to promote the public good against private greed.
During Albano’s watch, we saw electricity rates increased from P7 to as high as P11/kWh, ERC approved overcharging by MERALCO through its various rulings and ‘preliminary authority’, and overpricing that ERC blithely legitimized by approving electricity charges by MERALCO without the necessary diligence to ensure that the least cost was being passed on to consumers.

We also saw the ERC under Albano, in grave neglect of duty, condone NPC’s over-collection of billions of pesos from the consumers by turning a blind-eye to NPC’s failure to correct its foreign exchange currency denominated obligations every three months, as required by law. In the most recent instance, 21 months had passed and some ten billion pesos were over-collected by NPC from consumers before ERC felt compelled to act.  Albano also failed to expedite the refund to consumers of Meralco’s meter and bill deposits.

That Mr. Albano presided over an ERC riddled with a shoddy record, where good governance was replaced with regulatory capture, and still would have the nerve to recommend his daughter-in-law to succeed him, is a direct affront to 12 million Filipino households which he and the ERC had victimized and made poorer throughout his watch at the ERC.

The selection of the new ERC Chair must be guided by the highest sense of propriety, among others. The appointing authority should ensure an open and transparent process of selection to choose the candidate with utmost probity, competence, and commitment to the public good and the common welfare.

We call upon Gloria Arroyo to put an end to appointing political allies and cronies as rewards to such a crucial post as the ERC. The bad practices of traditional politics have no place in what should be a modern and modernizing ERC.  Instead, someone who has the competence in regulation and a track record in promoting and protecting the public interests should be the chief regulator.

The ‘trapo’ mindset of the politicos has no place in the Commission.  “Good riddance, Chairman Albano. NO! to another politico in ERC.”

15 July 2008


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