Since being established in June 2001, under the Electric Power Industry Reform Act (EPIRA), the Philippine Energy Regulatory Commission’s (ERC) value to the Filipino people has been inestimable, guiding the nation’s electricity landscape toward competition, affordability, and sustainability, way before it was common practice.
For over 24 years, it has implemented landmark reforms and has authored crucial rulings governing today’s energy market while leading the digital transition at the energy sector.
Before the passing of EPIRA, the energy sector in the Philippines was operated and maintained by the Philippine government through the National Power Corp., which practically controlled the whole of the industry. From this, EPIRA divided the electric power industry into four, namely, generation, transmission, distribution, and supply. This led to the founding of three key institutions: the quasi-judicial ERC, the National Transmission Corp. (TransCo), and the Wholesale Electricity Spot Market (WESM).
Under the EPIRA, power generation was opened to competition and made accessible to the energy giants supplying power to Filipinos today. The transmission and distribution of electricity remained regulated activities, falling under the rate-setting authority of the ERC. Furthermore, supplying electricity to the contestable market was no longer classified as a public utility function, which meant that suppliers were not required to obtain a national franchise. In a sense, the founding of the ERC in itself laid the foundation for the competitive and highly sustainable energy sector in the present.
Once established as a regulatory body, the ERC began to promote competition, encourage market development, ensure customer choice, and penalize abuse of market power. One of the first regulatory acts carried out by the commission was to unbundle power rates and promulgate grid and distribution codes. These efforts created a more transparent and accountable energy sector by allowing consumers to see the true cost of electricity generation, transmission, and distribution.
In 2009, the ERC implemented a regulatory approach and procedure for resetting the rates of power distribution utilities and the National Grid Corporation of the Philippines (NGCP) based on a “performance-based regulation” (PBR) framework. At present, both distribution utilities and the transmission operator use this same framework when submitting applications for their revenue requirements or during rate reviews. Essentially, the PBR framework encourages regulated entities to operate more efficiently and competitively by tying their performance to the rates they are allowed to charge.
By 2010, the ERC rolled out the country’s first Feed‑in Tariff (FiT) rules pursuant to the Renewable Energy Act of 2008. FiTs are mechanisms designed to encourage the development and use of renewable energy sources by guaranteeing a set price, usually higher than the market price of electricity from conventional sources, for electricity generated from renewable sources like solar, wind, or hydro.
ERC Chairperson and CEO Atty. Monalisa C. Dimalanta joined one of the panels at the BusinessWorld Economic Forum last May. — The Philippine Star/Russel Palma
The mechanism laid out by the ERC 15 years ago enabled the country, in part, to become the second-most attractive emerging market for renewable energy (RE) investment, according to the 2024 Climatescope report by BloombergNEF. This also led to booming investments like the Northwind Power Phase II located in Bangui, Ilocos Norte and the MW Sevilla Mini-Hydro located in Bohol.
Three years later, the commission adopted ERC Resolution 09, Series of 2013, approving the Rules Enabling the Net-Metering Program for Renewable Energy. Another step toward sustainability, the resolution allowed customers of distribution utilities (DUs) to install an on-site RE facility, usually solar panels on roofs, not exceeding 100 kilowatts (kW) in capacity so they can generate electricity for their own use. Furthermore, any electricity generated that is not consumed by the customer is mandated to be automatically exported to the DU’s distribution system which is then converted to peso credits deducted to the customer’s electricity bill.
Right before the pandemic, the Supreme Court ordered the ERC to revise its methodology and calculations stemming from a petition filed by the National Association of Electricity Consumers for Reforms that sought the courts to assail ERC’s approval of Manila Electric Co.’s (Meralco) unbundled rates in 2003. The Court highlighted that determining “just and reasonable rates” involves striking a balance between the interests of consumers and those of investors.
Recently, challenges brought about by the coronavirus disease 2019 (COVID‑19) and urgent climate goals prompted the ERC to revamp regulations for modern sector demands. One of the immediate responses by the commission was to ensure continuous and reliable electricity service during lockdowns, while also protecting consumers from sudden rate hikes and service disruptions. This included issuing advisories on deferred billing, staggered payments, and ensuring that distribution utilities were providing the appropriate lifeline and subsidy rates to vulnerable customers.
Data- and sustainability-driven governance
One of the few silver linings of the pandemic was that it accelerated the shift toward digital services across industries, including the ERC. In 2023, the commission launched “ERC LINKod,” an internal system designed to improve efficiency in processing applications and monitoring cases. This platform has helped streamline regulatory operations by providing automated updates, enabling better coordination among stakeholders, and increasing transparency in regulatory processes.
The ERC conducted a series of inspections, surveillance activities, and testing and calibration procedures last April to verify the compliance of several distribution utilities or electric cooperatives with technical standards and regulatory requirements. — www.facebook.com/ERCgovPH
To further its effort to digitalize services, the ERC unveiled a suite of new digital tools aimed at improving transparency and consumer empowerment just last year. Among these was the Energy Virtual One-Stop Shop (EVOSS) Dashboard, which consolidates critical data on compliance, licensing, and project status. This tool has reduced red tape and enabled investors and developers to track their applications in real time.
Additionally, the ERC Procurement PH platform was launched to give the public access to bidding information, procurement contracts, and notices, effectively reinforcing accountability within the organization. The dashboard provides data on procurement documents like bid bulletins, purchase orders, and notices of award, as well as ERC’s audit trail and project publishing.
Meanwhile, BuyYourElectricity (BYE), a consumer-facing platform, helps end-users compare power suppliers and understand their billing better, thus encouraging informed consumer choices in the retail electricity market. Launched just six months ago, the website aims to empower consumers with tools to make informed decisions about their Retail Electricity Suppliers (RES).
These digital advancements reflect ERC’s broader shift toward data-driven governance, which aligns with international best practices and the Philippines’ commitment to a cleaner, more inclusive energy future.
Another major area of regulatory innovation has been the implementation and expansion of Retail Competition and Open Access (RCOA). As mandated by EPIRA, RCOA allows eligible end-users to choose their own supplier instead of being limited to their local distribution utility. By enabling more competitive procurement of electricity, RCOA aims to lower electricity costs and promote efficiency among power producers.
Aside from feed-in tariffs and net-metering, the ERC has supported the rollout of other initiatives advancing sustainability in the energy sector, namely the Renewable Portfolio Standards (RPS) and the Green Energy Option Program (GEOP). While not a program directly under the commission, the ERC enforces compliance with these programs and ensures that the associated costs are fairly and transparently reflected in electricity rates.
Under RPS, electricity suppliers are required to source a specific portion of their energy from renewable sources. This creates a steady demand for clean energy and ensures a diversified energy supply. GEOP, on the other hand, allows eligible consumers to choose renewable energy as their power source from licensed suppliers.
With its ongoing digital transformation, deepening of technical expertise, and strengthened institutional independence, the ERC is well-positioned to steer the country’s power sector into a future that is cleaner, more competitive, and more inclusive. — Mhicole A. Moral
