The Energy Regulatory Commission (ERC) has defended its handling of electricity “Line Rental” charges and highlighted ongoing corrective measures following a complaint filed against its leadership with the Office of the Ombudsman by consumer advocacy group NASECORE.
The complaint names ERC Chairperson Francis Saturnino C. Juan alongside the four commission members, raising questions regarding the proper billing and treatment of Line Rental charges in end-users’ electricity bills. In response, Juan expressed readiness to cooperate, maintaining that the commission’s actions are legally sound.
“The law places the power to review the Commission’s actions with the Court of Appeals and the Supreme Court, and we welcome that scrutiny,” Juan said. “We take consumer concerns seriously. That is why we have already answered NASECORE’s questions in writing, in detail, not once but twice. We remain confident that our processes are grounded in law, and we are ready to have that record examined by any appropriate body.”
The regulator clarified that Line Rental, formally termed the Bilateral Line Loss and Congestion Cost (Bilateral LLCC), is an integral component of the Wholesale Electricity Spot Market (WESM) settlement system. According to the ERC, the charge accounts for price variations occurring between electricity generation points and final delivery locations, primarily driven by transmission losses and grid congestion.
Distribution utilities and electric cooperatives pay this cost through the Energy Trading Amount to WESM, which is subsequently passed on to retail consumers under the Generation Charge component of their bills.
The ERC noted that utilities submit generation cost calculations and WESM billing statements monthly for evaluation. When errors or discrepancies are discovered, the commission mandates refunds or additional collections as appropriate. The agency confirmed it had addressed NASECORE’s inquiries in two detailed responses dated July 13 and August 4, outlining the legal foundations, verification procedures, and billing protocols governing Line Rental.
Addressing historical spikes in Line Rental fees, particularly severe instances in the Visayas caused by transmission bottlenecks, the ERC highlighted that corrective steps are already underway. On August 13, the regulator approved targeted interventions, including the temporary suspension of Line Rental billing under conditions that trigger severe price distortions, as well as the adoption of a long-term calculation mechanism to stabilize charges.
Additionally, the ERC directed the Independent Electricity Market Operator of the Philippines (IEMOP) to hire an independent auditor to recalculate relevant market settlements retroactively to June 26, 2021. The audit aims to quantify the financial impact on consumers and utilities, establishing the technical baseline for any necessary rate adjustments or monetary refunds.
While reiterating respect for NASECORE’s right to approach the Ombudsman, the ERC noted that certain requested records contain proprietary market information that can only be disclosed through established legal channels. The regulator added that NASECORE can still present specific concerns during public rate confirmation hearings or pursue judicial recourse before the appellate or supreme courts.
The ERC affirmed its commitment to ensuring all electricity costs passed to the public remain fair, fully verified and aligned with statutory standards.