The Energy Regulatory Commission (ERC) admitted the absence of rules following its failure to approve NGCP’s 4th regulatory reset application on time.
During the hearing of the House Committee on Legislative Franchises, ERC chairperson Monalisa Dimalanta confirmed that “there were no rules after the 3rd regulatory period had lapsed.”
Based on the original timeline, NGCP’s 4th and 5th regulatory reset applications should have covered the years 2016 to 2020 and 2021 to 2025, respectively.
The ERC however modified the regulatory reset periods to 2016 to 2022 and 2023 to 2027.
“The regulatory reset rules apply for a particular regulatory period. Paglampas po ng regulatory period na iyon, mayroon na talagang vacuum in the law,” Dimalanta said.
While NGCP filed an issues paper to demonstrate its desire for a reset, Dimalanta stressed that “it doesn’t cure the fact that there were no rules at that time.”
“In 2020, NGCP applied for an interim rate. It’s a recognition that there were no valid issued, approved rates from 2016 all the way to 2020, kaya po sila nag-apply ng interim,” Dimalanta explained.
She added that when the ERC issued a decision on the interim maximum allowable revenue (MAR), its temporary nature was explicitly stated, and a full regulatory reset remained necessary to establish the correct rates.
“Kaya po interim lang ang pinasa ng Commission because it’s all subject to a full reset,” she explained.
When asked by Committee Chairperson Gus Tambunting on what rules NGCP must follow, Dimalanta admitted that the ERC should have resolved the 4th regulatory reset instead of relying on interim arrangements.
“Klaro naman po na dapat naglabas ang ERC noon. I think it was also recognized that the interim that they’ve applied for in 2020 was only an interim arrangement. Hindi siya final rules. It’s all subject to the final action in a reset,” Dimalanta maintained.
