By Benjamin Cuaresma
MANILA, Philippines — A major electricity consumer group has asked the Office of the Ombudsman to investigate the Energy Regulatory Commission (ERC) over billions of pesos in “line rental” charges passed on to electricity consumers, raising questions about the legal basis, computation and eventual disposition of the controversial costs.
The National Association of Electricity Consumers for Reforms (NASECORE) filed a complaint against ERC Chairman Francis Saturnino C. Juan and Commissioners Floresinda Baldo-Digal, Marko Romeo Fuentes, Amante Liberato and Paris Real.
NASECORE president Pete Ilagan said the complaint seeks to determine whether the ERC had sufficient legal and regulatory basis to allow the charges to be embedded in consumers’ electricity bills and whether the amounts credited back through the power market were fully returned to those who ultimately shouldered the costs.
The complaint comes at a particularly sensitive time for the power sector, with electricity consumers in the Visayas repeatedly facing severe supply shortages and soaring charges.
Line rental, technically associated with bilateral line loss and congestion costs, arises from differences in electricity prices between the location where power is generated and where it is ultimately consumed.
The charge can either be positive or negative, depending on market conditions, and is reflected through the generation component of electricity costs rather than appearing as a separate line item on consumers’ bills.
NASECORE is questioning whether consumers received the full benefit of credits generated under the system.
The group is particularly concerned about electric cooperatives and utilities in the Visayas, where recurring transmission constraints and supply shortages have coincided with sharp increases in line rental charges.
The complaint also places renewed scrutiny on the ERC’s handling of the issue after the regulator itself acknowledged problems in the existing market mechanism.
In August, the ERC ordered the suspension of erroneous line-rental charges in certain circumstances and directed a retroactive audit and refund of overcharges dating back to 2021.
The commission said its review found that congestion at high-voltage direct-current links connecting Luzon, Visayas and Mindanao could distort the market settlement process, causing line rental charges to rise beyond the actual cost of congestion and losses.
The ERC also said the resulting market surplus could be returned to participants who did not bear the corresponding higher costs, while consumers in constrained areas—particularly the Visayas—carried the burden.
That regulatory action now gives greater weight to NASECORE’s demand for an independent examination of how the charges were imposed and accounted for.
For consumer advocates, the controversy ultimately comes down to what appears on household electricity bills.
The head of the Association of Generation Managers of electric cooperatives said the practical consequence of line rental charges is straightforward: higher electricity rates when the costs are passed on to consumers.
NASECORE wants the Ombudsman to establish whether the ERC’s treatment of the charges complied with existing laws and regulations and whether consumers received every credit or refund to which they were entitled.
Juan, for his part, said the commission welcomes the complaint.
“We welcome the opportunity to defend our actions in the appropriate forum,” the ERC chief said.
The Ombudsman complaint was filed as the country’s power supply situation again deteriorated in the Visayas and Mindanao.
On Tuesday, the Visayas grid was placed under red alert from 2 p.m. to 9 p.m., with yellow alerts before and after that period. Available capacity was estimated at about 2,168 megawatts, with several major generating units unavailable and electricity imports from Mindanao remaining limited.
The Mindanao grid was likewise placed under yellow alert from 1 p.m. to 8 p.m., with available capacity at about 2,555 MW against projected peak demand of 2,450 MW.
The continuing alerts underscore the pressure facing consumers in regions already dealing with the financial impact of transmission constraints and market-related charges.
For NASECORE, the issue is no longer simply a technical dispute over how electricity is priced.
It is a question of whether consumers were made to pay billions of pesos under a mechanism that the regulator itself has now moved to correct—and whether every peso that should have returned to consumers will actually find its way back to them.
ia/xf
