Sanchez pushes for ERC’s fiscal independence

Chairman Manuel R. Sanchez is determined to gain ERC’s fiscal independence. During a forum recently initiated by NASECORE at the UP National Engineering Center, he sought the assistance of all electric industry stakeholders to support ERC’s bid for fiscal autonomy.

Sanchez believes that a fiscally autonomous regulatory commission will be more efficient if it is accorded greater flexibility in its operations. He observed that in other jurisdictions, such as the State of Nevada in the U.S., the regulator is allowed to collect one-half cent per kWh from electric utilities as regulatory fee.

“We could also do the same thing here for as long as it is made transparent to the public”, the Chairman pointed out. The proposed regulatory fee will be a separate item in the consumer’s electric bill.

Sanchez emphasized that the Commission needs funds to train its personnel, buy modern meter testing equipment, and intensify its regulatory investigation and inspection activities. “We also need to have the salaries of our employees upgraded to encourage them to stay in the organization,” he added. At present, ERC is exempted from the coverage of the Salary Standardization Law (SSL), but its employees are the lowest paid in the electric industry.

ERC is currently regulating such power firms as NPC, TRANSCO and PSALM whose combined budget for 2003 is P263 billion and combined manpower of 7,601 compared with ERC’s budget of P104 million and 196 workforce.

In terms of budgetary appropriation and manpower complement, Chairman Sanchez lamented that ERC looks like an ant regulating elephants. In addition, ERC regulates Meralco, other distribution utilities and 119 electric cooperatives. “How then can ERC effectively enforce the new energy law under this difficult situation?” he queried.

ERC Chairman Sanchez’s call for the regulatory body’s fiscal autonomy requires an amendment in the Electric Power Industry Reform Act (EPIRA).

“What we urgently need now is fiscal autonomy to make ERC indeed a strong and independent regulator,” Chairman Sanchez concluded.

July 23, 2003