The substantial delay in the regulatory approval of power supply agreements (PSAs) was among the factors blamed in the never-ending high electricity rates burden of the Filipino consumers – and that had been particularly manifest in this year’s summer months because many power utilities were compelled to procure from the high-priced spot market, instead of sourcing more affordable power from their contracted capacities.

During a budget briefing for the energy sector in the House of Representatives, House Committee on Appropriations Chairman Elizaldy Co had flagged ERC’s slow action on the approvals of the PSAs as an unwarranted burden -- not just on the timely cost recovery for investors, but the cost impact that this predicament has been bringing forth on the ratepayers.

To speed up processes on the evaluation and approvals of power supply deals, the ERC has been prodded to come up with cost benchmarking tool that it can employ in its PSA approval strategies.

ERC Chairperson Monalisa C. Dimalanta admitted that the level of PSA approvals had just been at 46% - and that carried through as a lingering dilemma since the establishment of the regulatory body roughly 25 years ago.

“We studied our case universe in the ERC and the resolution rate of the ERC for PSAs is 46% since the inception of (the) ERC – so not even half those number of cases have been resolved by the ERC,” Dimalanta admitted.

The ERC chief further acknowledged that “there’s a huge backlog on the PSAs,” hence, she indicated that they are amenable to the ‘benchmarking proposal’ that the chair of the Appropriations Committee has been pitching for.

In this year’s summer months, it is widely known in the power industry that many PSAs had not been acted upon immediately by the ERC, thus, many power utilities had high level of exposure in the Wholesale Electricity Spot Market (WESM) while prices were on incessant surge.

Had their PSAs been approved on time, the power utilities - including the electric cooperatives - could have procured supply at more cost-competitive rates instead of sourcing from the spot market at very volatile prices – and that in turn, contributed to the rate spikes that had been billed to the consumers.

Dimalanta noted they are now sorting out plans for rate benchmarking in handling PSA cases, but she emphasized that they still struggle on securing more data.

“The study is just taking time because we also need data from the industry sources – and they are not very lenient when it comes to data sharing, that’s why we need to search for more reliable sources of data. But in terms of systems, we have been pursuing benchmarking,” she stressed.

Beyond that, the ERC chief sounded off the regulatory body’s need for ‘structural reform’ in its setup as an organization, instead of Congress just approving a higher budget for the Commission on a yearly basis.

She conveyed that the solution for that bid also lies with Congress via the proposed amendments to the Electric Power Industry Reform Act (EPIRA) – and the propounded modification in the ERC functioning is for it to be turned into a ‘corporatized’ entity, instead of it purely relying on budgetary provisions from the government.