Power collapsed absolutely | Inquirer Business

Power collapsed absolutely

True to his tough guy style, the motor-biking Duterte Harley recently threatened the Energy Regulatory Commission, the “independent” regulator of the power industry. He wanted the entire commission to resign, claiming he had documents on their corruption.

It seemed the President referred to the “suicide letters” of the late ERC director Francisco Villa Jr, made famous in synchronized reports in the media demolition job against the ERC.

ERC Chair Jose Vicente Salazar took the brunt of the attack, yet he went on leave to distance himself from the simultaneous investigation by the COA and the NBI.


Salazar is a technocrat, with BS Electrical Engineering degree from UP, law degree from Ateneo and master degree from Harvard. He joined the DOJ as undersecretary under the GMA administration, and the Aquino (Part II) administration failed to kick him out being a “career” official.


The three Villa letters were actually written on three different dates some three months prior to the death, addressed to “Dear Lord Jesus.” They talked about pressure from Salazar to approve a P300,000 contract, although they did not give details.

Surely the letters would indicate the poor man’s rather fragile emotional state, perhaps serious depression. Still his letters became the smoking gun of the corruption in the ERC. Well and good! It would be foolish to argue with dead men.

It would be ridiculous to say, as media reports did, that the ERC commissioners would try to steal tax money from the project worth P300,000.

Going around the power sector were mountains of money, with total sales at the retail level at about P700 billion a year.

That was the kind of temptation—not the P300,000 contract—that we should be more concerned with the ERC as the quasi judicial regulator of the business.

The anti-ERC attacks insinuated that Villa was also under pressure on so-called PSAs, the “power supply agreements” between power generators and distributors like Meralco.


That was absolutely wrong! The bids and awards committee headed by the late Villa had nothing to do with PSAs that ERC technical personnel handled.

Starting in the late 2015 when Salazar was appointed, the ERC started on reforms in the industry. To enhance competition, it imposed on the PSAs this fairest of business tools called “bidding.”

That was never done in 15 years of “reforms” in the sector under this law called “Epira,” the Electric Power Industry Reform Act of 2001.

Personally, I tried to do research on Epira. Was it working? Executives in the industry seemed happy with it. I concluded that the industry simply would have its way with the ERC. The good intentions of Epira seemed to have collapsed absolutely.

In its 15 years as regulator of the power industry, the ERC became known as the hotbed of regulatory capture. At the expense of consumers for sure!

In fact, a survey done by the Makati Business Club last year showed that the ERC ranked among the top five “worst performing” government agencies.

That same Epira required the privatization of power plants, which eventually led to the creation of the new oligarchy. Only a few private companies controlled the entire lucrative power sector in the country. Hey, just three companies in the entire Luzon!

Business groups already complained about collusion among players in the power sector. Some 15 years after EPIRA, according to the ADB, our electricity rates actually increased by more than 130 percent.

Under Salazar, the ERC thus introduced major changes, such as the implementation of the forgotten Epira provision called “retail competition and open access,” or RCOA.

Because it allowed users to choose the retailer of electricity, it was designed to break the monopoly of distributors like Meralco.

In fact, the ERC had to fight cases filed by Meralco on RCOA, even getting the dreaded TRO from the Pasig court.

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Guess what—the Supreme Court eventually overturned the Pasig court. RCOA went into effect. This spelled trouble for ERC. Even from Duterte Harley!

TAGS: Duterte Harley, Electric Power Industry Reform Act of 2001, energy regulatory commission, Epira, ERC, Jose Vicente Salazar, power, power industry

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