ERC urged to exercise its authority to enforce EPIRA
Philippines Star, January 8, 2004

The chairman emeritus of the UP Law Alumni Asso­ciation urged the Energy Regulatory Commission (ERC) to exercise its authority to interpret and enforce the Elec­tric Power Industry Reform Act or EPIRA.

In a position paper entitled "Sequel to the Revised Treatise on Public Service Law," Antonio Meer, chairman emeritus of the UP Alumni Association, Inc., said the EPIRA gives the ERC sole authority to interpret and en­force the law within its provision and legal limits.

Meer said the ERC must at all times ensure its inde­pendence and cold enforcement of the law, without fear or favor. He also reiterated that under the EPIRA, the ERC must ensure the quality, reliability and affordabili­ty of the supply of electric power. He also urged that the balance between cost of power and the ability of the elec­tric-utility to perform its function efficiently must be maintained.

He also cited the view that power producers are al­ready raising the warning signs that there can be an im­pending power crisis since investors-international and local - are shying away due to the climate of invest­ment.

Meer also stressed that under Section 43, subsection (f), Chapter IV it is clearly provided that the ERC alone has the right to choose the methodology, which it will employ to allow the recovery of just and reasonable costs and a reasonable return on rate base (RORB) to enable the entity to operate viably." The ERC may adopt alter­native forms of internationally accepted rate-setting methodology, as it may deem appropriate.

"And the rates shall be non-discriminatory. On this crucial point the signal is clear. The EPIRA has given the ERC the exclusive authority to employ an internationally accepted methodology to allow players a fair and rea­sonable return on its rate base," Meer said.

The ERC earlier granted Meralco a provisional au­thority to adjust its rates by 12 centavos per Kwh start­ing Jan. 1, 2004 . The commission in its order took note of Meralco's financial difficulties and said it is aware of the fact that Meralco's present condition has result­ed in its failure to meet its maturing debt obligations.

The commission said that as a natural consequence, this makes it more difficult for Meralco to secure new borrowings and finance major electric projects. The provisional adjustment would enable the power serv­ice provider to fully pursue deferred capital invest­ments in its distribution system and provide better serv­ice to all its consumers.

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