Protecting electricity consumers

IN ITS penultimate stage, the P-Noy administration has to pass numerous legislative bills that the President and his Cabinet have endorsed.

An urgent one is the passage of a basic law about the Comprehensive Agreement on the Bangsamoro (CAB), which P-Noy wants passed before his term ends. The enactment of the CAB must be done within P-Noy’s term, lest it be scuttled by a different administration.

Also in the context of continuity, it is in the interest of the current administration to institutionalize matuwid na daan (the straight path) through the legislation of open data and freedom of information.

Other measures require legislation to deal with binding constraints. For example, despite the high additional revenues generated from the 2012 sin tax law and the aggressive collection of taxes, government has to pursue additional reforms to meet its tax effort target of around 17%. (In end-2012, it stood at 12.9%.) Thus, the administration is pushing for the rationalization of fiscal incentives and the reform of mineral taxation.

Another binding constraint, which is now felt, is the inadequate power supply. The administration is reviewing the Electric Power Industry Reform Act (EPIRA), aiming at introducing amendments that will correct weak regulation and market failure.

Indeed by its very nature, the power industry is vulnerable to regulatory capture. The joke is the ERC (Energy Regulatory Commission) actually means Energy Regulatory Capture. Recall how the ERC arbitrarily granted the Manila Electric Co. an anomalous and excessive price increase, only to reverse course in the wake of popular and political pressure.

In the context of reforming the power industry, another bill deserves support of the Executive and the 16th Congress. This is House Bill (HB) No. 3336, titled “An Act amending Republic Act 7394 entitled the Consumer Act of 1992, creating the Office for the Protection of Electricity Consumers and Appropriating Funds therefor and for other Purposes.”

Amid all the urgent or crucial legislative measures mentioned above that have to be passed, HB No. 3336, authored by Representative Henedina Razon-Abad, might not get the necessary attention.

Why then is it necessary to have this Razon-Abad bill passed in this Congress?

We just experienced a spike in our electricity bills, which fortunately the ERC reversed. A first line of defense against uncalled-for exorbitant electricity price increases is to have the interest of consumers represented in applications and petitions for rate setting.

But, as Representative Razon-Abad has noted, “neither the EPIRA nor any other law has provided for an office to protect the interest of the consumers.” The creation of the Office for the Protection of Electricity Consumers (or OPEC) fulfills the task of protecting the consumers’ rights and welfare, ensuring the transparency of the decision-making of the regulators, and making ERC and the utility corporations accountable to all stakeholders. OPEC also helps government be true to its mandate of providing reasonable and affordable power rates.

OPEC is a consumer advocate. Its advocacy revolves around ensuring that tariffs or rates for generation, transmission, and supply are fair and reasonable and that stable and reliable power service is provided.

Specifically, OPEC becomes the default intervenor and oppositor to represent consumers in petitions or applications with regard to setting of electricity rates. It can appeal or contest controversial decisions done by the ERC to the Court of Appeals or the Supreme Court.

OPEC, according to the bill, “shall ensure the lowest possible rates in any and all ERC proceedings involving petitions and applications by all electricity providers…” To be effective, it has the power to conduct independent investigations and technical reviews of petitions and applications.

As such, the body must be composed of people who have the competency and expertise in the area of rate setting in the electricity sector.

It is necessary to drum up support for the passage of HB No. 3336 or the Razon-Abad bill. It is good for the consumers. It is good for governance. It is good for daang matuwid.

No comments yet.