Salazar sets ‘consensus-building approach’ in resolving ERC cases

by Myrna Velasco, 16 August 2015
from Manila Bulletin

Newly installed Energy Regulatory Commission (ERC) chairman Jose Vicente B. Salazar will become the “chief referee” or the “consensus-builder” when it comes to resolving conflicting issues and concerns of multiple parties in the electricity sector.

In an exclusive interview, Salazar enthused “I hope I can make use of my being a consensus-builder in terms of achieving the goals for the industry” – primarily those on having sufficient and reliable electricity supply that must also flow into the consumers’ meters at reasonable rates.

He gives premium to “transparency” when it comes to the interest of parties coming to the ERC for their resolution of issues – noting that such could only be the known effective starting point in reaching a feasible compromise.

“I want everybody to be transparent with their respective interests and we have to see whether we could find a middle ground to address their needs… if I need to sit down with groups so issues will not end up in heated debates, I will do that.”
He added “if we can have discussions and mutual respect with each other, understanding each other’s needs, then we can try to determine how they can achieve a particular goal while protecting their respective interests.”

Salazar is aware that the power sector is traversing an interesting transition – not only on the business sense but also in policy and regulatory frameworks at the time that he is taking over the ERC’s helm. At the same time, he is mindful of the weaknesses that he has to improve on while leading the Commission.

In fact, he admitted that he initially declined the position, knowing that “some people are more qualified and are much more capable of performing the job, but when the Office of the President asked me again if I was interested … the second time around, I said yes.”

Salazar is similarly inclined to bring to new height of debate the concepts of “reasonably-priced electricity” as well as the provision of reliable and efficient electricity supply and service within the industry’s regulatory toolbox. In these, he cited the need for balance on the consumers’ bid for affordable rates and the investors’ appreciation of what could be an enticing terrain for capital flow in power projects – and in the core of these – how competition will eventually play out.

“My mission here is: I want to steer the discussion on how we would be able to do something to influence the policy in order for us to have reliable, safe and efficient supply of electricity at reasonable rates,” he stressed, adding that “I am always a firm believer in competition – competition will always bring out the most reasonable and competitive rates and it will definitely benefit the consumers.”

Nevertheless, he qualified that “I also want to temper the expectations at least during the time that we are starting with a new era and with a new set of framework which we’re going to use in terms of regulation of the industry.”

Salazar stressed “I know that the rates are a bit high according to some sectors, but I want to mobilize my engineering and legal background maybe to influence some procedures and policies for us to help in making the rates reasonable and competitive.”

He further noted “you need the private sector to come in to provide investors for us to be able to provide that particular need of the consumers, so the balance is: if it is attractive enough to provide the means to generate for us that service (electricity), then that tends to be reasonable.

It is difficult to say: Let’s bring down the rates to R2 or R1.5 per kilowatt-hour, but what if there are no interested industry players? What we are all learning from that is that there is always a threshold level when the industry would be enticed to come in.”

He acknowledged though that there will certainly be “some birth pains,” as he laid down that they will also be keeping an eye on the entwined government policy relative to the mandates of the Competition Law when it comes to anti-competitive behavior and market abuses that are also encroaching into the business affairs of the power sector.

For him, agreeing to take on the post had been anchored on three goals: first, to answer a call of duty for the country; second, to take on a new challenge; and third, to deal with a new opportunity of addressing the Filipino consumers’ fundamental need for electricity to sustain their quality of life.

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