THE Energy Regulatory Commission (ERC) has been urged by a noted industry analyst and University of the Philippines professor to make sure power-industry players will remain oriented toward proconsumerism in their operational and marketing activities.
Prospero de Vera III of the University of the Philippines’ National College of Public Administration and Governance said, as regulator, the ERC must make sure more power players, such as distribution utilities (DUs), must be governed by the ERC’s new regulatory regime, called the Performance-based Regulation (PBR).
Since the ERC subjected a number of DUs and our national transmission company under PBR in April 2009, many of them have “reinvented themselves to become consumer-driven organizations,” said de Vera.
De Vera identified one feature of this regulation scheme, the Guaranteed Service Levels (GSLs) system, which has “changed the behavior, if not the attitude, of power firms to be on their toes in keeping their customers satisfied and reducing customer complaints.”
The ERC installed the GSL system that rewards or penalizes any company that falls short of its “threshold levels” on specific types of proconsumer actions.
De Vera illustrated the behavior-changing GSL system by citing specific target actions or standards for a distribution utility firm. For example, if a customer experiences a total aggregate of 35 hours in one regulatory year, the DU will pay each customer P120. On the other hand, if a household suffered brownouts 25 times or more in one year, the DU will pay the customer P150.
The ERC has also set a standard for the response time of a DU in restoring electricity during brownouts. “If such restoration has taken more than 15 hours in one instance of a brownout, the DU will pay P120.
The ERC also made sure that the DU is not remiss in its obligation to keep its word to applicants for new power connection. If the DU is one day late in “connecting” the household, the DU pays P47 per day of delay, up to a maximum of P235.
“This ERC-directed standard has steadily evolved a proconsumer culture among players in the electric- power industry,” stressed de Vera, adding that this kind of regulation has finally changed the behavioral pattern of power companies whose mindset has changed in favor of the consumer.
De Vera noted that almost six months into the application of the PBR, the country’s largest distribution utility, Meralco, paid more than a hundred million pesos to its customers in the form of fines and penalties prescribed by the GSL system. “It is only under PBR that a penalty and fine system is being imposed. It has thus strengthened consumer welfare and protection, which is a very important component in national development,” revealed de Vera.
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