(MANILA BULLETIN)

The Energy Regulatory Commission (ERC) chief admitted before congressmen on Monday, Dec. 23 the lack of updated rules following the agency’s failure to approve system operator National Grid Corporation of the Philippines' (NGCP) fourth regulatory reset application on time.

During the hearing of the House Committee on Legislative Franchises, ERC Chairperson Monalisa Dimalanta confirmed that “There were no rules after the third regulatory period had lapsed.”

Based on the original timeline, NGCP’s fourth and fifth regulatory reset applications should have covered the years 2016 to 2020 and 2021 to 2025, respectively. 

However, the ERC modified the regulatory reset periods to 2016 to 2022, and 2023 to 2027. 

“The regulatory reset rules apply for a particular regulatory period. Paglampas po ng regulatory period na iyon, mayroon na talagang vacuum in the law,” Dimalanta said.

While NGCP filed an issues paper to demonstrate its desire for a reset, Dimalanta stressed that “It doesn’t cure the fact that there were no rules at that time.”

“In 2020, NGCP applied for an interim rate. It’s a recognition that there were no valid issued, approved rates from 2016 all the way to 2020, kaya po sila nag-apply ng interim (that's why they applied for interim),” Dimalanta explained.

She added that when the ERC issued a decision on the interim maximum allowable revenue (MAR), its temporary nature was explicitly stated, and a full regulatory reset remained necessary to establish the correct rates.

“Kaya po interim lang ang pinasa ng commission (That's why the commission only submitted an interim) because it’s all subject to a full reset,” she explained.

When asked by committee chairman, Parañaque City 2nd district Rep. Gus Tambunting on what rules NGCP must follow, Dimalanta noted that the ERC should have resolved the fourth regulatory reset instead of relying on interim arrangements.

“Klaro naman po na dapat naglabas ang ERC noon (It's clear that ERC should have released rules by then). I think it was also recognized that the interim that they’ve applied for in 2020 was only an interim arrangement. Hindi siya final rules (These weren't final rules). It’s all subject to the final action in a reset,” she maintained.