ERC top execs face new raps before Ombudsman

By Lenie Lectura – July 10, 2017

from Business Mirror

Top officials of the Energy Regulatory Commission (ERC) are facing another set of charges before the Office of the Ombudsman.

A group calling itself the Laban Konsyumer Inc. (LKI) on Monday said it had filed criminal and administrative charges against the suspended chairman of the ERC and three commissioners, docketed as OMB-C-C-17-0242 and OMB-C-A-17-0212, respectively.

The consumer group, headed by lawyer Victor Mario A. Dimagiba, alleged that ERC Chairman Jose Vicente B. Salazar, who remains under preventive suspension, and commissioners Josefina Patricia Magpale-Asirit, Gloria Victoria Yap-Taruc and Geronimo Sta. Ana violated their mandate to ensure the adequate promotion of consumer interests under Section 41 of the Electricity Power Act, in relation to the recent power-rate hike brought about by the scheduled 20-day shutdown of the Malampaya natural-gas facility, which supplies 40 percent of Manila Electric Co.’s (Meralco) power requirements, early this year.

The gas plants fueled by the Malampaya facility had to resort to alternative fuel, which is more expensive than gas.

The cases alleged corrupt practices committed by the ERC executives, as well as violation of the Code of Conduct governing public officials, through manifest partiality, evident bad faith and gross inexcusable negligence when they awarded benefits to Meralco by granting a petition to collect a total of P1.7 billion in March, April and May 2017 from Meralco consumers.

This has resulted in an increase of P0.2211-per-kilowatt-hour rate hike in the three months.

LKI accused the ERC officials of violating the Corrupt Practices Act (Republic Act 3019 Section 3e), the Code of Ethics of Government Officers (RA 6713 Section 5a)  and the Revised Penal Code (Articles  204, 205 and 206). The original complaint was filed on March 30, wherein the complainant was issued subpoena in Fact Finding (FF)–C-17-0417, and was ordered to execute a supplemental affidavit complaint to include administrative liability.

The consumers’ group challenged the ERC order, dated March 6, as biased, against the consumers’ interest and against the law, when the commissioners granted provisional authority in favor of Meralco using the force majeure provisions of the Meralco Power Supply Contracts, where force majeure is defined as all forms of fuel-supply interruption.

The commissioners determined an announced and scheduled preventive maintenance shutdown as force majeure and allowed  Meralco to pass on all added costs of fuels to the consumers, instead of ordering these added costs to  be absorbed by  the natural-gas supplier, said Dimagiba, former trade undersecretary.

Dimagiba added the gross inexcusable negligence and bad faith of the commissioners in the discharge of their duties is aggravated by the fact of the collective absences of the commissioners in the hearings on the merits of the case (March 14, 17 and 27), wherein the consumer group pleaded with the commission to suspend, reverse or recall the provisional authority.

The above hearings were presided over merely by a hearing officer, whereas, on the other hand, and as revealed by their own records, the commission en banc had met twice with Meralco on the subject matter even before the filing of their petition, LKI said.

The Ombudsman will now proceed with the preliminary investigation of the criminal case and the adjudication of the administrative case in accordance with Rules and Procedures of their Office.

These rules also authorized the Ombudsman to order preventive suspension from office of all commissioners for up to six months during the pendency of the investigation.

Earlier, Sanlakas, Freedom from Debt Coalition and Heidi Nicodemus alleged in another complaint filed before the Ombudsman that the ERC commissioners opted to delay the mandatory implementation of the competitive selection process (CSP).

As a consequence, the complainants said the commissioners allegedly gave unwarranted benefits, advantage and preference to different distribution utilities (DUs), including Meralco and generation companies (gencos), with expiring power-supply agreements (PSAs).

As a result, the DUs and gencos were free to negotiate new PSAs under their own terms, caused undue injury to the public who now have to suffer higher electricity rates from the disadvantageous PSAs entered into by the DUs and gencos, the complaint stated.

The complaint alleged that the commissioners deliberately adjusted the rules and implementation of the CSP, enabling Meralco to push through with its PSAs without a transparent and public bidding.