ERC commissioners suspended for one year over ‘anomalous transactions’

The Office of the Ombudsman has ordered the one-year suspension of four commissioners of the Energy Regulatory Commission in connection with the alleged anomalous transactions involving power generation companies affiliated with the Manila Electric Co. (Meralco).

The Ombudsman ordered the suspension, without pay, of Commissioners Gloria Victoria Yap-Taruc, Alfredo Non, Josefina Patricia Magpale-Asirit, and Geronimo Sta. Ana.

The order leaves former Solicitor General and incumbent chairperson  Agnes Devanadera as the sole official in the ERC.

Dismissed ERC chairman and Chief Executive Officer Jose Vicente Salazar was also ordered to pay a fine equivalent to his six month's salary and was named respondent in the graft case.

The Office of the President found Salazar guilty of misconduct and dismissed him from the service in October.

The Ombudsman acted on acomplaint filed by Alyansa Para sa Bagong Pilipinas Inc. accusing the ERC officials of favoring Meralco after they extended the deadline for distribution companies to conduct a competitive selection process (CSP) in procuring power supply to April 30, 2016.

In its resolution, the Ombudsman said it found all the elements of graft against the respondents when they suspended the implementation of the CSP to accommodate Meralco's power supply agreements (PSA).

The ERC extended the CSP deadline from November 6, 2015 to April 30, 2016. This led to the accommodation of Meralco's PSA where they then negotiated with seven of its sister power generation companies out of the total 38 firms who bid for the 4,500-megawatt production cap. The ERC awarded 3,551 megawatts to Meralco alone.

"The requirement for CSP as mandated by the [Electric Power Industry Reform Act, Department of Energy] and ERC, cannot be reasonably stopped by the requests for clarification, exception and/or exemption from CSP from numerous industry participants, especially when the stakeholders were already heard in extensive consultations conducted by the ERC," it said.

The Ombudsman added the ERC officials "cannot feign ignorance" that Meralco may take advantage of the PSA filing, calling the justification of the respondents on the extension and the lack of guidelines for its 45-day window untenable.

"The CSP is an acknowledged mechanism to make the cost of PSAs more reasonable. Hence, accommodating companies' request to be exempted from CSP was a deviation from respondents' duty to promote public interest through the CSP requirement," the Ombudsman said.

The Ombudsman ruled that the ERC officials clearly gave undue preference to Meralco when they circumvented government policies. It said their actions denied consumers the "opportunities to elicit the best price offers and other PSA terms and conditions from suppliers."

"Their non-implementation of the requirement of CSP cannot hide under the cloak of presumption of regularity in the performance of their official duties," the resolution read.

"There is sufficient evidence that respondents gave unwarranted benefits to Meralco and other companies by exempting them from the coverage of the CSP requirement... The 45-day period gave Meralco and other companies the opportunity to dispense with CSP," it added.

'ERC will seek guidance'

ERC spokesperson Florensinda Digal said the commission would seek guidance from Malacañang as regards the suspension of the officials.

She said the Ombudsman's order was expected to affect the country's economy.

"Considering that the ERC is under the Executive Department, the commission will be seeking guidance from the Office of the President relative to the recently released Ombudsman decision especially that this will have a significant impact not only to the electricity consumers but to the economy as well," Digak said. —NB/BM, GMA News