ON September 5, Ombudsman Samuel Martires issued what is one of the most embarrassingly faulty and ill-considered rulings ever to come out of the Office of the Ombudsman. He ordered the six-month preventive suspension of Energy Regulatory Commission (ERC) Chairman Monalisa Dimalanta at the behest of the National Association of Electric Consumers for Reform Inc. (Nasecore), which is one of those insufferable, self-appointed organizations posing as consumer advocates even though no one asked or wants them to.
Martires' decision was in response to a complaint filed by Nasecore in November 2023, which has been characterized by the group — and repeated by every news outlet in town, including this one — as a charge against the ERC and Manila Electric Co. (Meralco) Chairman and President Manny V. Pangilinan (even though the Office of the Ombudsman has no jurisdiction in the latter's case) for Meralco's purchase of electricity from the Wholesale Electricity Spot Market (WESM) without approval. This allegedly led to unnecessarily high electric rates for consumers and was thus a dereliction of duty on the ERC's part.
The Ombudsman's suspension order, however, makes no mention of the WESM or Meralco's power purchases. What it does cite as grounds for finding that "the guilt of respondent Dimalanta is strong and the charges against her involve Grave Misconduct, Grave Abuse of Authority, Gross Neglect of Duty and Conduct Prejudicial to the Best Interest of the Service, which may warrant her removal" is the ERC's delay in processing the periodic rate rebasing for Meralco, and failure to resolve five different nuisance motions filed with the ERC by Nasecore between March and June 2023.
Those motions — all demanding various audits of Meralco and the production of documents — were likely a partial cause of the foregoing delay, one which the ERC's current commissioners inherited from their predecessors when they took office. Even stopping to examine the motions to determine whether they were valid and should be addressed would slow things down at the already overworked ERC. Entertaining them and following through with what they requested — most of which was redundant, anyway, and covered by the ERC's process — would have set back the rate rebasing, already years behind schedule, several months or more.
That logic cramp in the Ombudsman's order was admittedly subtle and that he missed it is just another example of how highly technical economic sectors — energy is not the only one — suffer here due to a general lack of real-world knowledge and expertise in every part of the court system. Most Philippine judges, regardless of what bench they sit on, are first-rate lawyers and legal scholars, but almost none of them have ever been engineers or accountants, and it shows.
And on the topic of logic cramps, one may ask how black the pot is calling the kettle when the Ombudsman is penalizing the ERC chief for a delay in ruling on cases in her agency when he is only now completing the first step in a case filed to his office more than nine months ago. Rules for thee but not for me is apparently the watchword there.
The biggest and dumbest flaw in the Ombudsman's order is, of course, his ignorance or forgetfulness that the ERC is not one person, as his office is, but a commission. It says so in the name. The ERC chairman's signature on orders or interactions with other government agencies, industries under the ERC's purview, the media, or anyone while she's on the clock is, by legal definition, only as the designated representative of the commission, which acts collegially. If the Ombudsman sees fit to suspend anyone for dereliction of duty at the ERC, he is bound by its constitutional definition and common sense to suspend the entire three-person commission, as they are collectively responsible for the ERC's orders and decisions, or lack thereof.
As to the charge being bandied about in news reports — but not addressed at all in the Ombudsman's order — that the ERC "allowed" Meralco to buy higher-priced electricity at the WESM without the ERC's approval, that is not only a gross misrepresentation of the case — at best, that Meralco had to buy power on the spot market because of the rate rebasing delay can only be inferred, an inference that can be quickly proven wrong — it displays the ignorance of the supposed "consumer advocates" in Nasecore about how electricity supply transactions actually work.
At most, Meralco only purchases about 20 percent of its supply needs through the WESM because it is careful to secure better-priced, long-term supply contracts, both to keep consumer prices as reasonable as can be managed and make doing business a bit easier. Spot-market purchases are sometimes necessary, such as when a power plant unexpectedly shuts down or when electricity demand is unusually high, but for Meralco or any other distribution utility, resorting to the spot market is actually kind of a pain in the ass. For one thing, any rate adjustment as a consequence of supply costs through the WESM has to be approved by ERC, and it can only be done after the fact. The purchase itself does not require ERC approval, nor can it; if every distribution utility or cooperative had to get approval beforehand, the spot market literally could not exist, and most of the country would experience continual power outages.
What happens next is anyone's guess; what should happen is that the Ombudsman rescinds his suspension order against the ERC chairman, sets a date for a proper hearing of the aging case filed by the Nasecore gang, and lets the process demonstrate to the complainants how illogical and without merit their case actually is. I don't think that's going to happen; Philippine officials, at any level, are loathe to admit error, so Dimalanta would probably just find herself with an unexpected sabbatical, at the end of which she would turn with the status not having gone too far beyond quo. In the meantime, any development requiring ERC action will be put on hold, energy sector investors will sit on their hands until the current situation is resolved, and the Department of Energy and the rest of the country can continue to be frustrated by the lack of progress in reforming and expanding the energy portfolio.