ERC’s 22 years of empowering the electricity market through regulation

Regulating electricity is necessary to fair competition in the power market and safeguard the interests of consumers. As the country’s independent regulator of the electric power sector, the Energy Regulatory Commission (ERC) has been taking on these tasks for the industry, consumers, and stakeholders for more than two decades.

Several developments were made regarding the regulation of the energy sector before the ERC was eventually established in 2001.

In November 1936, the Public Service Commission (PSC) was reorganized through the Commonwealth Act No. 146 or the Public Service Law. The PSC held the jurisdiction, supervision, and control over the entire public services, which included the electric power service as well.

With the preparation of the Integrated Reorganization Plan by the Commission on Reorganization, as ordered by Presidential Decree No. 1, the PSC was abolished in September 1972. The Board of Power and Waterworks (BoPW) assumed PSC’s regulatory and adjudicatory functions concerning the electric industry and water resources.

The government then established the Department of Energy (DoE) in October 1977 and abolished the Oil Industry Commission (OIC), which was built in 1971 through the Republic Act No. 6173. With Presidential Decree No. 1206, the OIC was replaced by the Board of Energy (BoE), which also took on BoPW’s powers and functions over the electric power sector.

The BoE was reconstituted as the Energy Regulatory Board (ERB) through Executive Order No. 172 in May 1987. This was undertaken to consolidate and entrust the entire regulatory and adjudicatory functions relevant to the energy industry into a single body. The ERB had the authority to regulate power rates and services of private electric utilities. The ERB’s focus of responsibility then became concentrated on the electric industry, with the full deregulation of the country’s oil industry in 1998.

June 8, 2001 marked the enactment of Republic Act (R.A.) No. 9136 or the Electric Power Industry Reform Act (EPIRA) of 2001, which abolished the ERB and created the ERC.

As per Section 43 of the EPIRA, it is the ERC’s duty to “promote competition, encourage market development, ensure customer choice and penalize abuse of market power in the restructured electricity industry.”

(Upper left photo) ERC Chairperson and CEO Atty. Monalisa C. Dimalanta (left) and ERC Commissioner Catherine P. Maceda (right) during the launch of the Competitive Retail Electricity Market (CREM) System Monitoring Platform. (Lower left photo) ERC officials Ms. Dimalanta, Ms. Maceda, and Commissioner Alexis M. Lumbatan with DoE and USAID officials witnessing the launch. (Right photo) DoE Undersecretary Rowena Cristina L. Guevara (leftmost) and USAID Philippines Mission Director Ryan Washburn (rightmost) express their support for the said project. — Photo from www.erc.gov.ph

For 22 years now, the ERC has been executing the combined quasi-judicial, quasi-legislative, and administrative functions in the electric industry. Apart from doing its functions on rate and service regulation, it also takes on the responsibilities of ensuring the education and protection of consumers as well as promoting competitive operations in the electricity sector.

The ERC is currently led by Atty. Monalisa C. Dimalanta, who has been the commission’s chairperson and chief executive officer since August 2022 and would serve until July 2029.

The ERC also began to operate in a new home last year, as it moved its office to the Exquadra Tower in Ortigas Center in Pasig City.

Atty. Dimalanta hoped that respect, accountability, and excellence are the values that would guide and be observed by the ERC. She added that respect should be the baseline in every dealing of the ERC, as the commission takes on “a transformational journey” toward becoming the most trusted government agency in the country.

Her vision for ERC is to become a center of excellence in the Philippines and the ASEAN (Association of Southeast Asian Nations) region. This would entail opening up to “new, better, and other ways of crafting and enforcing regulations,” according to a statement released by the commission.

“We can do exchange programs with other regulators in the region so that they can learn from us, and we can learn from them. ERC will carry a badge of professionalism and unmatched understanding of the energy industry,” Ms. Dimalanta said.

The ERC also presented a new vision, mission, and strategy map in its annual report for 2022.

“To meet the needs of an evolving power industry, the ERC adopted its new vision, mission, and strategy roadmap,” Atty. Dimalanta said in the report. “The various Services and Divisions at the ERC courageously confronted the agency’s limitations and challenges, and then diligently prepared strategies that will ensure the realization of our aspirations.”

In its strategy map for 2023 to 2026, the ERC envisions to work year on year as an electric power industry regulator that is esteemed for its “independence, credibility and fairness,” and complies with the best practices in public service. The ERC looks to being acknowledged as “an enabler of inclusive and sustainable economic development.”

“Towards this end, transparency and accountability shall be our primary principles which we shall live by at the ERC for years to come,” Ms. Dimalanta said.

The ERC is also on a mission to attend to the needs of all energy stakeholders with timeliness and in a value-creating way. This will be done through the development of free and fair competition as well as making certain that rates are reasonable through practicing “prudent and equitable” judgment. The commission will also work on championing consumers’ welfare and interests, as well as upholding a transparent and judicious regulatory environment that builds inclusive and sustainable growth and development.

Part of the ERC’s three-year strategy map is digital transformation, an initiative accelerated by various organizations since the pandemic in 2020. The ERC already stated its preparedness to undertake a digital shift for the new normal back in 2021.

One of its recent efforts involving digitalization is for the processes of the Competitive Retail Electricity Market (CREM) to be digitalized through the launch of the CREM Monitoring and Report System as well as the Retail Electricity Supplier (RES) Scorecard Survey in April.

“The CREM Monitoring System and the RES Scorecard Survey are important tools that will ensure robust competition in the market,” Ms. Dimalanta said.

The CREM Monitoring System is a website platform that brings different processes together, including the RES licenses registration and renewal; receipt of monthly and quarterly compliance reports from RES and Distribution Utilities; and creation of reports, analytics, and other relevant data concerning CREM. The RES Scorecard, meanwhile, provides the public access to RES scores and make comparisons.

“EPIRA was adopted 22 years ago to promote and enable competition. Among others, it created opportunity for consumers to exercise the power of choice. That power of choice need[s] to be supported with the right tools, like the CREM Monitoring System and RES Scorecard Survey, as this will enable our consumers to make informed decisions,” ERC Commissioner Catherine P. Maceda said. — Chelsey Keith P. Ignacio