Last of two parts

IMPOSING consistent regulation is challenging, given the frequent intervention of the courts, which can sometimes take years to render a judgment. A recent case involving an electric distributor in Pampanga is just one example.

In March 2023, the Energy Regulatory Commission (ERC) ordered the San Fernando Electric Light and Power Co. Inc. (Sfelapco), which serves the capital of Pampanga and the nearby towns of Floridablanca and Bacolor, to pay a P21.6 million penalty and refund P654 million to its customers for disallowed and excess charges from 2014 to 2022. Sfelapco filed a motion for reconsideration that the ERC ejected on June 1, 2023. The company was also ordered to pay an additional P1.76 billion in refunds to customers.

But Sfelapco appealed the ERC ruling to the Court of Appeals, which in a Nov. 30, 2023, decision reversed the ERC's refund order. In its decision, made public in January 2024, the CA said the order was disallowed "due to lack of legal and factual basis," and that the ERC "violated Sfelapco's right to due process when it ruled on the case." The basic assertion of the court was that while ERC was correct in determining that Sfelapco had imposed unauthorized charges on its customers, there was no specific provision in the law requiring a refund.

The CA's ruling appears illogical. After all, if one is convicted of theft, he does not get to keep the stolen property.

ERC Chairman Monalisa Dimalanta agreed with this view and said the ERC would appeal the CA ruling, with the help of the Office of the Solicitor General. Despite problems like this, however, she said the courts do have an important role to play.

"The ERC is a quasi-judicial body, so our decisions are subject to review by the courts," Dimalanta said. "I have no problem with that, it is a good thing. If we have made the right decision, having the confirmation from the court helps; likewise, if we have made a mistake — although we work very hard not to make mistakes, of course — then we need to know about it so we can make improvements."

The obstacle the court system poses to regulation is more of a management problem, in Dimalanta's view, and it is one that fortunately may be resolved in the coming years. "The oversight by the courts is not the problem; the problem is that it is such a slow process," Dimalanta said. "Some cases can take up to 10 years before there is a ruling. One of the reasons for that is simply because these cases are often very technical and require a lot of research on the court's part," because not every judge can be expected to be well-versed in the intricacies of utility regulation.

The Supreme Court is reportedly considering expanding the special court system to provide more efficient coverage of highly technical cases, such as cases involving the ERC. While this is not likely to be carried out overnight, such courts would help to reduce the uncertainty created by unresolved legal questions.

Expanding consumer choice

Dimalanta highlighted the expansion of the Retail Competition and Open Access (RCOA) program, which designates large consumers as "contestable customers," and allows them to choose their electricity supplier. A complementary program, the Green Energy Option Program (GEOP) also allows contestable customers to dictate that all or part of their supply come from renewable sources.

The RCOA program is being expanded in two ways. First, the threshold at which one can become a contestable customer has been lowered to 500 kWh per month. Second, with the completion of the Mindanao-Visayas interconnection, the RCOA program can be extended to Mindanao. That will happen later this year. Dimalanta said there was a slight delay, but only because the consumption threshold was being reviewed to determine if 500 kWh would give Mindanao customers the same level of choice as the rest of the country, or would need to be adjusted.