ERC Needs More Power to Audit Electricity 'Pass-Through' Costs, Senator Says

MANILA, Philippines — Senate President Sherwin Gatchalian is urging for enhanced powers for the Energy Regulatory Commission (ERC) to audit not only distribution fees but also the "pass-through" costs associated with electricity generation. This move aims to ensure consumers are not unfairly burdened by excessive charges. Pass-through costs refer to expenses incurred by utility companies for production and delivery rates from power plants and distributors, which are then directly added to consumer bills. "Pass-through charges need to be audited. We, consumers, need to be assured that what is being passed on to us is not excessive," Gatchalian stated during a Senate energy panel hearing. He emphasized that while businesses aim to maximize profits, regulators must ensure they earn a decent, but not excessive, amount. The hearing, held amid rising fuel prices, focused on strengthening the ERC. ERC Chairperson Saturnino Juan admitted that the agency has "not thoroughly" checked the right prices for fuel pass-through. He also acknowledged the need to "come up with audit steps to determine really what should be the appropriate pass-through." Gatchalian criticized the ERC's current limitations, describing them as making the government "blind" to the pass-through charges affecting energy consumers. "I believe that the price that is passed on to us because it is not checked, we do not know what is really being passed on to us… The ERC should not only look at the distribution charges, but they should also look at the pass-through. Because we are blind. The government is blind when it comes to pass-through," the senator pressed. Energy panel chairperson Sen. Erwin Tulfo also grilled Juan on the lack of checks and balances for these charges. Tulfo questioned if Juan agreed that the situation constituted "abuse," to which Juan responded he "had no basis" to say so. This drew a sharp reaction from Tulfo, who retorted, "You have no basis, but the people know that they were abused and shamelessly ignored." This push for greater transparency and accountability in electricity pricing reflects growing public concern over rising energy costs in the Philippines.