The Market Monitor Minding the Nation's Business
By Rose de la Cruz
Believing that monopoly power distributor, Manila Electric Company, has been overbilling consumers, the National Association of Electricity Consumers for Reforms Inc. (NASECOR) asked Malacanang to compel the Energy Regulatory Commission to act on a petition to audit Meralco, and if warranted, refund them from overcharged rates.
In a letter to President Marcos Jr., NASECOR stressed the urgency of its motion in view of the continued stalling of ERC to act on their audit petition for nearly two years. The group argued that the continued inaction by ERC would justify dismantling the commission.
At the same time, the Palace recently appointed ERC chair Jesse Hermogenes Andres as OIC of ERC during the six-month suspension of Monalisa Dimalanta, an appointee of former President Duterte along with commissioners Alexis Lumbatan, Catherine Maceda, Floresinda Baldo-Digal and Marko Romeo Fuentes. But Dimalanta was reappointed by Marcos in 2022.
Andres’ appointment as ERC OIC chair and Chief Executive Officer was signed by Executive Secretary Lucas Bersamin on Sept. 20– a copy was also sent to Justice Secretary Jesus Crispin Remulla– “in order to ensure continuous and effective delivery of services.”
Andres’ appointment takes effect immediately, “until a designated or until otherwise directed by” the Office of the Executive Secretary.
The Ombudsman suspended Dimalanta for six months for her failure to resolve various petitions and complaints lodged in her office by NASECORE. The suspension was dated August 20 based on “evidence on record that the guilt of respondent is strong and the charges against her involve grave misconduct, grave abuse of authority, gross neglect of duty and conduct prejudicial to the best interest of the service , which may warrant her removal from the service.”
The Ombudsman said the suspension will prevent any prejudice if Dimalanta will remain in office while the Ombudsman conducts its investigation.
NASECORE president Pete Ilagan, in a letter to the palace, highlighted the organization’s pending motion before the ERC, urging it to conduct a regulatory audit of Meralco. An audit by the Commission on Audit more than a decade ago led to over P35 billion in refunds for consumers.
He emphasized the urgency of its motion, noting that the ERC has failed to act for nearly two years. The organization argued that continued inaction by the ERC would justify dismantling the commission.
“It is with this backdrop in mind that we urge Your Excellency to strongly encourage the ERC to rule on our motion for a regulatory audit of Meralco and other pending incidents and actions affecting consumers before the commission—otherwise, a drastic overhaul of the commission is overdue and necessary,” Ilagan said.
NASECORE believes that if the COA audits Meralco, more improper expenses will be uncovered, likely resulting in another refund for customers.
“Our motion for a regulatory audit of Meralco covering the current and previous regulatory periods has also been left pending because we believe Meralco has been gouging its customers during these periods—including a lapsed period of seven years, which is the subject of another NASECORE complaint—leaving the impression that the ERC, headed by Hon. Dimalanta, has been extremely lax, remiss, and negligent in performing its duties, with the onus on Hon. Dimalanta as chairperson,” Ilagan said.
The ERC has sat on NASECORE’s complaint against Meralco’s application to increase its charges for over 600 days, prompting the group to raise the issue with the Ombudsman.
Meralco applied for a rate hike of P1.56 per kilowatt-hour for the 2023 to 2026 period, known as the fifth regulatory period. This amount is higher than the previous interim rate of P1.3810 per kWh, which the ERC deemed excessive and resulted in an order for Meralco to refund over P40 billion to consumers.
The power utility giant filed its application for rate approval on March 16, 2022, followed by an initial ERC hearing on April 26, 2022. A pre-trial conference was held on September 2, 2022, but when Meralco was set to present its evidence on September 16, 2022, the ERC postponed the hearing due to the absence of a pre-trial order. The pre-trial order was only issued on May 3, 2024, 609 days after the conference.
“The evidence on record strongly indicates that respondent Dimalanta is guilty of Grave Misconduct, Grave Abuse of Authority, Gross Neglect of Duty, and Conduct Prejudicial to the Best Interest of the Service, all of which could lead to her removal from office,” the Ombudsman said.
As a result, the Ombudsman suspended Dimalanta for six months, citing concerns that her continued presence could influence the case against her.
Dimalanta is suspended without pay.
This is not the first time an ERC chairman has been suspended in recent memory.
In 2017, then-ERC chairman Jose Vicente Salazar was placed under preventive suspension over graft and corruption issues. He was eventually ordered dismissed by Malacañang at the time, the Star recalled.
The ERC is a crucial regulator, as it is mandated to ensure “the adequate promotion of consumer interests and customer choice; promotes competition, encourages market development and penalizes abuse of market power. It is also responsible for enforcing the implementing rules and regulations of the EPIRA.”