01 December 2022
ENERGY REGULATORY COMMISSION
Pacific Center Building, San Miguel Avenue,
Ortigas Center, Pasig City
TO : ATTY. MONALISA C. DIMALANTA
Chairperson and CEO
FLORESINDA G. BALDO-DIGAL
Commissioner
ALEXIS M. LUMBATAN
Commissioner
CATHERINE P. MACEDA
Commissioner
MARKO ROMEO L. FUENTES
Commissioner
Subject: REFUND TO CONSUMERS OF P282M DONATION OF A HOUSING PROJECT AND P1.12 B EXPENSES ON ENTERTAINMENT, ADVERTISING AND PUBLIC RELATIONS
Dear Honorable Commissioners,
Warm greetings!
This pertains to the Commission’s letter thru Commissioner Alexis M. Lumbatan dated 9 November 2022 addressed to both NASECORE and NGCP which scheduled a virtual conference on 06 December 2022 (Thursday) at 10:00 A.M. to address the issues which NASECORE had raised with NGCP and ERC as early as February 2022 and brought to the attention of the office of President Ferdinand R. Marcos , Jr. on 1 September 2022. This pertains to the procrastination of the Commission in resolving the issues of NGCP’s P282 M donation and annual expenses of P1.12 B on advertisement, entertainment and public relations.
Surprisingly, the said Commission’s letter appears as if this is the first time the issues have been raised with the Commission.
On the scheduled virtual hearing, we regret to say that, as much as we want to attend this hearing, the undersigned cannot as he already has a prior commitment on the said date and time.
Please allow us to point out that said virtual hearing, coming nine (9) months after the concern/issues were first raised, was prompted by NASECORE’s elevation of the matter to the Presidential Complaint Center and not by any sense of urgency in resolving this serious matter.
It must be noted that the Commission had received both NGCP’s comments and clarification
on NASECORE’s twin issues and NASECORE’ rebuttal of the same in March 2022. Thus for the Commission to schedule a virtual hearing after a prolonged delay, when it was already ripe for resolution months ago, there being no dispute as to the facts, is to indulge the dilatory tactics of NGCP and frustrate the consumers who provide the funds for NGCP’s operation thru the ERC-approved Maximum Annual Revenue (MAR) of more than P40 Billion. This is tantamount to a denial of justice.
We believe that the Commission, with its regulatory functions, has all the necessary information at hand as it receives regular reportorial submissions of fund utilization from NGCP which will show its compliance or non-compliance with the regulatory criteria that these expenses must be necessary, recurring and redounding to the interest of the consumers. Expenses such as donations are not considered and categorized as allowable expenses because a donation to a particular person or entity does not benefit all the consumers and expenses for advertisement, entertainment and public relations in billions of pesos annually are not integral to the business of a regulated utility performing a public service as a substitute to the State such as NGCP.
It is also worth mentioning that the letter of Gloria D. Silverio, Director IV of the Commission on Audit to the ERC dated 22 March 2022 says, “ Based on our initial assessment on the letter complaints by NASECORE President Ilagan, this office finds it reasonable for ERC , as a regulatory body , to determine and assess the veracity of the alleged NGCP expenses pursuant to Republic Act No. 9136, otherwise known as the Electric Power Industry Reform Act (EPIRA) law. Section 43(f)(v) of the EPIRA law states that “ any significant operating costs or project investment of the TRANSCO and distribution utilities which shall become part of the rate base shall be subject to verification by the ERC to ensure that the contracting and procurement of
the equipment, assets and services have been subject to transparent and accepted industry procurement and purchasing practices to protect the public interest.”
Thus, the Commission should now follow the COA’s bidding moto proprio as a REGULATOR and, based on the undisputed facts, enter a NOTICE OF DISALLOWANCE and direct the NGCP Board to refund within one (1) month the amount of P282 M and P1.12 B to the coffers of NGCP and that the refund must come from NGCP profits and not from its operating and maintenance or capital expenditures budget or from the hide of the consumers.
Further, we are requesting for copy of the Commission’s Order and proof of NGCP’s compliance. Should there be further delays, we shall be constrained to seek the necessary legal remedies to protect public interest against the Commission’s inaction.
Thank you.
Very truly yours,
PETRONILO L. ILAGAN (SIGNED)
President
Copy furnished:
His Excellency, President Ferdinand R. Marcos, Jr.
Hon. Raphael PM Lotilla, DOE secretary
Hon. Raffy T. Tulfo, Chairman- Senate Committee on Energy
Hon. Risa N. Hontiveros, Senator
Hon. Lord Allan Jay Velasco, Chairman-House Committee on Energy