Aboitiz appeals to Palace to resolve ERC gridlock

Published January 25, 2018, 12:00 AM

by manilabulletin_admin

By Myrna M. Velasco

With three of its major power projects coming on-line in the coming weeks and months, Aboitiz Power Corporation has already been prompted to make a direct appeal to Malacanang for it to finally put right the standoff that has been technically crippling the Energy Regulatory Commission.

“We are appealing to the national leadership to resolve the ERC issue as soon as possible so the Commission can get back to work and act on many pending issues awaiting their decision,” Aboitiz Power President and Chief Operating Officer Antonio R. Moraza has noted in a statement to the media.

The Aboitiz plants that are already on commissioning and testing phases are those of the 400-megawatt Pagbilao facility expansion in Quezon; the 340MW Toledo plant in Cebu; and its 68.8MW Manolo Fortich hydropower project in Bukidnon.

The gridlock messing up the operations and functions of the ERC is out to make dent on Aboitiz Group’s power generation business if the regulatory problem of the industry persists.

Moraza has opined that “a fair and functioning ERC is critical for the energy sector to work.”

He added that “a working regulatory body balances the welfare of the paying consumers, interests of the private investors and the government’s desire for reliable and ample power.”

Malacanang first made its appointment of ERC Acting Commissioner last January 19 in Catherine P. Maceda, but as of Tuesday (January 23), it was indicated that the person-designate had “declined” the posting.

By a stroke of the pen, the Department of Energy (DOE) in collaboration with the board of the operator of the Wholesale Electricity Spot Market (WESM) also issued a resolution over the weekend relaxing terms of the capacity offer of power plants without certificates of compliance (COCs) or permits to operate, but that raised more questions than answers as to the industry’s dilemmas – as well as on perceived attempts of the DOE to encroach into ERC’s regulatory functions.

Some generation companies (GenCos) similarly noted that they are not amenable to the DOE directive because it may eventually compromise their bids for legally binding cost recoveries, especially so since the ERC had not been party to the issued resolution.

On the appointment of “acting Commissioners”, legal minds in the industry are also poring over the validity of such action, chiefly on premise that there had been no ‘declaration of vacancies’, hence, the ERC-Commissioner posts cannot just be legitimately filled up, especially by outsiders of government service.

“The more prudent thing to do and for love of country is for at least two of the suspended Commissioners to have the discernment to resign,” a legal executive of one major industry player has noted.

The four Commissioners of the ERC had been suspended by the Office of the Ombudsman last December 22, thus, a non-functioning Commission has been knocking down a very critical sector for more than a month already.