ERC stresses right to grant permits

The Energy Regulatory Commission (ERC) has stressed it has regulatory authority in the granting of certificates of public convenience and necessity (CPCN) to utilities engaged in the transmission or distribution of electricity in the country.

This statement was made to clarify doubts by some quarters over the authority of the ERC to issue CPCNs.

The ERC promulgated the rules to govern the issuance of CPCNs to entities engaged in the transmission and distribution of electricity last month to guide applicants and grantees in the orderly filing and renewal of CPCNs.

“Section 43 (p) of the EPIRA clearly mandates the ERC to act on applications for or modifications of certificates of public convenience and/or necessity, licenses or permits of franchised electric utilities in accordance with law and revoke, review and modify such certificates, licenses or permits in appropriate cases, such as in cases of violations of the Grid Code, Distribution Code and other rules and regulations issued by the ERC in accordance with law,” ERC chairman Rodolfo B. Albano Jr. said.

The ERC chief said the EPIRA defines a distribution utility (DU) in a collective manner as any electric cooperative (EC), private corporation, government-owned utility or existing local government unit which has an exclusive franchise to operate a distribution system.

“It is hoped that the ECs and other concerned parties have been enlightened on the ERC’s duty to issue a CPCN to a transmission or distribution utility. The ERC looks forward to a mutually beneficial cooperation system in the attainment of the reforms envisioned for the electric power industry,” Albano said.

A CPCN is an authorization issued by the ERC to entities engaged in the operation of a transmission or distribution system that have been granted by a franchise either by Congress, under the present laws, or other vested entities under the old laws.

All entities engaged in the transmission and distribution of electricity are required to file their formal application for a CPCN only before the ERC following amendment on the EPIRA to the pre-war Public Service Act.

Only legal applicants (corporations, co-partnerships, associations, or joint-stock companies with 60 percent of the stock or paid up capital entirely belong to citizens of the Philippines) with technical and financial capabilities and valid franchise for operating and maintaining a transmission or distribution system issued by Congress will be qualified for a CPCN issuance.

The ERC recently released new rules on the issuance of CPCN.

The rules spell out the technical requirements in filing for new or renewal of CPCNs; the obligations of the CPCN grantee; and the grounds for amendment or revocation of CPCN.

The ERC is also authorized to amend or revoke the CPCN of any entity under certain circumstances specified in the subject rules which include, among others, the failures in meeting service standards by electric utilities.

“This issuance is one of the latest contributions of the ERC towards reforming the electric power industry wherein the long-term consumer interests are promoted and protected,” Albano said.