Sen. Pacquiao’s Concern for the Consumer Should Lead to an Overhaul of the ERC’s Magna Carta for Residential Electricity Consumers

Elpidio V. Peria
17 August 2016

sen manny

from: http:///

Rappler recently reported newbie Senator Manny Pacquiao’s question to Department of Energy Secretary Alfonso Cusi about the systems losses of power producers being shouldered by the ordinary electricity consumers.

While such concern is laudable on the part of this new Senator who until recently has been mouthing questionable statements about the death penalty and the matter of giving a hero’s burial for the disgraced dictator Ferdinand Marcos, the neophyte Senator should push his emerging concern for the electricity consumer to its logical conclusion – the overhaul of the 2004 Magna Carta for Residential Electricity Consumers.

Why should the Senator bother with this seemingly beneficial document?

Because this supposedly grand-sounding document, issued by the Energy Regulatory Commission (ERC) in 2004, does not appear to be actually responsive to the basic concern of consumers like the ones raised by Sen. Manny – that of the consumers being burdened by systems losses incurred by power producers and besides that, the document does not also provide a clear means of redress over intermittent or frequent interruption of power supply to the point of annoyance and income losses to small businesses or how about the supposed collusion of power suppliers that lead to these unconscionable power rates in the first place, the Magna Carta does not at all deal with these issues, that’s why at the outset, for its failure to address these issues, the said document should be overhauled and updated, perhaps with a stronger set of rules that may be enforced by a body that is independent of the power industry sector.

Sen. Manny may even come up with a bill just to address the issues he raised and maybe he should call the Energy Regulatory Commission to a series of public hearings to see if the ERC has really made a good job of making the Magna Carta address consumer welfare, though that will be a futile task since the more fundamental gut issues that the new Senator is looking at, that of systems losses, is not at all addressed by this Magna Carta.

Examining the Magna Carta closely, while it may have spelled out clear basic rights for the residential electricity consumer, especially on the right to have quality, reliable, affordable, safe and regular supply of electric power in its article 4(a), in article 6’s mention of a right to electric service, the right to have a reliable and regular supply of electric power was not elaborated in greater detail, so it’s pretty obvious the right to be spared the misery of brown-outs or power interruptions appear to have been conveniently left out of this Magna Carta, though there is mentioned the right to be informed when these brown-outs may occur, in article 15 of the Magna Carta.

Let’s look closely at this matter of systems losses that Sen. Pacquiao seems to have noticed as an issue to raise, if one looks at the Magna Carta, this should be written into something like a negative right, like a right not to be burdened by losses that is not due to the fault or actions of the consumer, or something similarly worded.

When one surveys the other basic rights of a consumer in art. 4 of the Magna Carta, it reads something like the following, which are in addition to art. 4(a) that we have already mentioned above :

(b) to be accorded courteous, prompt and non-discriminatory service by the electric service provider;

(c) to be given a transparent, non-discriminatory and reasonable price of electricity consistent with the provisions of RA 9136;

(d) to be an informed electric consumer and given adequate access to information on matters affecting the electric service of the consumer concerned;

(e)to be accorded prompt and speedy resolution of complaints by both the distribution utility and/or the ERC

(f) to know and choose the electric service retailer upon the implementation of Retail Competition; and

(g) to organize themselves as a consumer organization in the franchise area where they belong and where they are served by the distribution utility or as a network of organizations.

If one goes to Chapter II of the Magna Carta which is dubbed as Consumer Rights (are the rights enumerated here different from the ones itemized on article 4 which are called “Basic Rights”, the Magna Carta does not really say) , there are around 22 such rights, particularly :

Art. 6 – right to electric service
Art. 7 – right to a refund of bill deposits
Art. 8 – exemption from payment of meter deposits
Art. 9 – right to an accurate electric watthour meter; determination of average error
Art. 10 – right to a refund of overbillings
Art. 11 – right to a properly installed meter
Art. 12 – right to a meter testing by electric utility and/or ERC
Art. 13 – right to a prompt investigation of complaints;
Art. 14 – right to extension of lines and facilities
Art. 15 – right to information; scheduled power interruptions
Art. 16 – right to a transparent billing
Art. 17 – right to a monthly electricity bill
Art. 18 – right to due process prior to disconnection of electric service
Art. 19 – right to a notice prior to disconnection
Art. 20 – right to suspension of disconnection
Art. 21- right to tender payment at the point of disconnection
Art. 22 – right to electric service despite arrearages of previous tenant
Art. 23 – right to reconnection of electric service
Art. 24 – right to witness apprehension
Art. 25 – right to ERC testing of apprehended meter
Art. 26 – right to payment under protest
Art. 27 – right to file complaints before the ERC

These rights, while some of them are important, are actually trivial, which revolves around the matter of getting connected to an electric service and all concerns related thereto, but the important issue of regular, reliable electricity at affordable or reasonable rates, without being charged the so-called unconscionable systems losses and be spared from brownouts or to secure redress or recompense in case of business losses arising from these low level of service, these are the more important things that were left out.

To add insult to injury, the ERC had the gall to lay down electricity consumers’ obligations, though there are just eight (8) of them, in addition to a broad obligations provision in article 5. What is clear is that these obligations were added to ensure that the electric power companies are duly paid; it only shows that the institutional instinct of the agency is the viability of the power companies , not the welfare or well-being of the consumer. Just look at these obligations :

Art. 28 – obligation to pay deposit
Art. 29 – obligation to allow inspection, installation and removal of electricity apparatus
Art. 30 – obligation to allow the construction of poles, lines and circuits
Art. 31 – obligation to receive monthly bills
Art. 32 – obligation to pay monthly bills
Art. 33 – obligation to pay billing adjustments
Art. 34 – obligation not to commit illegal use of electricity
Art. 35 – obligation to pay differential billing

Half of all these obligations relate to paying something, it should have been conditioned on having a reliable steady power supply in the first place, so that consumers will deem it worthwhile to make such payments.

For all intents and purposes, Sen. Manny Pacquiao should proceed towards knocking out systems losses out of electricity consumers’ bills and in doing so, should ultimately push ERC to overhaul the Magna Carta for Residential Electricity Consumers and if doing so should result in the reconfiguration of the electric power industry such that consumer welfare becomes its bedrock operating principle, like the Philippine Competition Act, then he will have become truly a hero that matters to the day-to-day lives of Filipinos.


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