The amendment proposes that the president will appoint candidates based on specified qualifications. I disagree.
One of the proposed amendments to the law requires commission members to be competent in specific fields. The fields of expertise listed—energy, law, economics, finance, commerce, and engineering—are relevant and essential. However, I think this requirement, alone, is not enough.
Relevant experience in energy sector
A competent lawyer with no experience in the energy field will not address the problem that the amendment seeks to resolve. We have seen that this lack of knowledge has led to decisions that are often impractical and disconnected from the industry's realities.
This problem can lead to commissioners being "captured" either by the bureaucracy of the ERC or by industry players. This lack of relevant experience may also lead to delays in the decision-making process because it may take commissioners some time to understand the complexities of the issues before they can decide.
The danger is that such experienced candidates would have come from significant energy players and might still receive pensions from these companies. For the appointment to be legitimate, there is a requirement for a two-year hiatus from any energy company when selecting a DOE secretary. We can adopt a similar rule when selecting ERC Commissioners.
Consumer representative
To mitigate this risk, at least one of the commissioners must be a legitimate consumer representative. Consumers ultimately bear the financial burden of the commission's rulings, so their inclusion in decision-making is essential.
One of the critical decisions that the ERC makes is calculating the "return of capital" and the "return on capital." A competent ERC Commissioner from the academe would be most helpful, especially in finance and economics.
At the end of the day, however, while competence is indeed needed, the more important consideration is to see who pays for whatever decision the ERC makes.
The Philippine government does not pay for the country's energy costs, even for the subsidies it claims to give. The subsidies for renewables and the island grids are all paid by electricity consumers. So, while the government has a legal mandate to select the commissioners, it does not have the MORAL mandate. Since consumers ultimately pay for everything, consumers should do the selection.
No to immunity to suits
There is a discussion of creating a Consumer Ombudsman body to regulate the ERC. Contrary to the proposed amendment, the ERC should not be immune to suits, and somebody must regulate the ERC.
This Consumer Ombudsman should oversee and regulate the ERC. It should also be the body that chooses the commissioners, not the government. If the government errs in its choices and delivers an incompetent ERC, it is not accountable because it does not pay for the error. Consumers end up paying for the mess that an incompetent ERC creates.
So, the consumers should have the power to choose.
A power industry expert with over 40 years in experience as chief executive officer in firms ranging from banking, power, and advisory services.
