EPIRA amendments to reform ERC readied

Published February 6, 2017, 10:00 PM By Myrna M. Velasco

http://business.mb.com.ph/2017/02/06/epira-amendments-to-reform-erc-readied/

The initial amendments to be lodged for the Electric Power Industry Reform Act (EPIRA) would be on the proposed reforms to “governance” issues and transparency concerns at the Energy Regulatory Commission, dubbed as the “ERC Governance Reform Act.”

According to Senate Committee on Energy Chairman Sherwin T. Gatchalian, the legislative agenda will tackle much-needed reforms in the country’s power industry regulation body, but they will not be leaning toward its abolition because that could scuttle multi-billion dollars worth of much-needed investments in the electricity sector.

“Reform is a much more appropriate process than abolition, because the industry is very complex and if we’re going to take out everyone, who’s going to manage regulation? It takes time to study the industry and the learning curve is too steep,” he opined.

Gatchalian noted that the Senate energy committee or the Joint Congressional Power Commission (JCPC), in which he is a co-chairman,  “will definitely consult international experts in regulation and also best practices in governance.”

He said the intent of the proposed legislated policy revision would be to “improve the checks and balances within ERC…we will also improve transparency at the ERC.”

On improving “governance concerns,” he noted that a position of a chief executive officer (CEO) may be added into the layer of the ERC’s bureaucracy, primarily to handle the agency’s budgeting and administrative matters.

“When it comes to governance, the prevailing international best practice would be to have CEO and chairman as two separate individuals, because you can’t have a CEO proposing the budget and also implementing it…so in terms of checks and balances, that is already a weakness,” the lawmaker stressed.

Moreover, on the transparent sphere of regulation, Gatchalian is advocating that rate-setting and other consumer-critical matters of discussions at the ERC be opened and within the lens of public scrutiny.

“If you want the public to understand the debates and understand rate-setting, we have to open that up – one of our proposals would be to open the discussions to make it public,” he said.

On ERC’s proposed fiscal independence, Gatchalian noted that they will just allow the regulatory body to retain certain fraction of earnings to partly fund its operations.

“We have not thought out of any specific figure or percentage yet, that will be up for discussion when we take up this governance reform measure,” he said.