MANILA – Senate President Sherwin Gatchalian on Thursday directed the Energy Regulatory Commission (ERC) to submit a timetable and detailed plan for auditing fuel-related charges passed on by power companies to consumers.
During the Senate Committee on Energy hearing, Gatchalian said generation accounts for about 60 percent of an electricity bill, with fuel comprising a substantial portion of the charge for coal, liquefied natural gas and other conventional power sources.
“Kung gusto natin pababain iyong electricity bill natin, dapat ma-target natin iyong pinakamalaking singil, which is generation (If we want to lower electricity bills, we should target the biggest charge, which is generation),” he said.
Gatchalian asked the ERC to determine whether fuel costs being charged by generation companies and distribution utilities reflect actual market and purchase prices, stressing the need to prevent consumers from being billed excessive amounts.
He also directed the commission to submit its audit resolution and identify regulated entities that have not complied with its requirements.
“Submit to us a timetable, submit to us an audit plan. We have to make sure that what is being passed on to consumers is reasonable and correct,” Gatchalian said.
ERC Chairperson and chief executive officer Francis Saturnino Juan said the regulator’s confirmation process allows refunds or additional collections once it establishes whether a distribution utility has over-recovered or under-recovered pass-through charges.
Juan said the ERC could immediately order the return of excess collections if an audit finds over-recovery, without prejudice to the issuance of a show-cause order.
He explained that distribution utilities would issue the refunds because they collect electricity payments from consumers, but may recover the amount from generation companies that failed to follow their fuel-adjustment agreements.
Gatchalian said the ERC must also examine the contracts between distribution utilities and generators, particularly agreements governing fuel-price adjustments.
He cited more than 400 show-cause orders issued by the regulator and sought updates on 104 distribution utilities and 37 generation companies reportedly covered by compliance concerns.
The Senate President warned that distribution utilities that repeatedly fail to comply with regulatory requirements could face a congressional review of their franchises.
“May mga prangkisa iyan na dumadaan sa Kongreso. So kung hindi sila sumusunod, puwedeng i-recommend ng ating chairman ang audit of their franchise or even cancellation (They have franchises that pass through Congress. If they do not comply, our chairperson may recommend a franchise audit or even cancellation),” he said.
Gatchalian clarified that the committee was not accusing power companies of wrongdoing but wanted safeguards against possible abuse during periods of volatile fuel prices.
Juan assured the panel that the ERC would submit the requested documents and information. (PNA)