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The Innovative, Courageous, Fair and Independent Regulator

August 15, 2019

The Innovative, Courageous, Fair and Independent Regulator

By Deputy Speaker and Antique Congresswoman Loren Legarda

ERC 18th Founding Anniversary

15 August 2019 | Quezon City

 

Good afternoon.

 

I am very pleased to be a part of the ERC’s celebration of its 18th Founding Anniversary.

 

Is this the ERC’s coming-of-age celebration? I am sure the “debutant” theme you have for this event is but a symbolism of an ERC reborn.

 

ERC’s “coming-of-age” started from the minute it was created upon passage of EPIRA on June 8, 2001.

 

We are all here to honor a milestone – a milestone, which, two years ago, would have been hard to imagine ERC would reach. This makes this celebration even more meaningful.

 

ERC’s existence over the past eighteen years is replete with assertions and prejudices that will make one seeking an honest career in government think twice before accepting a post.

 

Just imagine these headlines:

 

  • House gives ERC a measly budget of P1,000 for 2018
  • ERC vows transparency on electricity rate, but website always down say media
  • Laggard ERC sparks outages

 

These are but a few, and obviously, I edited out the more graphic ones.

 

Headlines and scathing attacks, whether substantiated or not, are par for the course for public servants.

 

The question is, “Do you let these headlines define who you are as a public servant and as an institution?” or “Should you define instead, the headlines that will make it to tomorrow’s news?”

I am both a Legislator and a journalist, and I ask that you take heed from my experiences.

I began my professional career as a journalist, taking inspiration from my grandfather, Jose Bautista, who was the editor-in-chief of the pre-martial law newspaper, the Manila Times.

 

As a journalist, I saw the realities of crumbling societies and the passing away of some of our greatest generations.

 

Through journalism, I testified on the harsh realities that beset societies – from the inequities in society, the destruction of cultures and the environment, the conditions that perpetuate the struggles of the poor, including how the lack of access to electricity perpetuate one’s bondage to poverty.

 

For the poor who can access it, the rising cost of electricity deprives them of resources that could otherwise help them guarantee food on the table, or money to send their children to school.

 

Ten years after the country experienced crippling brownouts of four to twelve hours everyday, Congress passed EPIRA in 2001. This led to the restructuring and privatization of the power sector, promising that increased competition will usher cheaper and more sustainable energy supply.

 

EPIRA offered a great framework with many unfulfilled promises; and we have to ask ourselves “why.”

 

I recall that some time, on the heels of the 2010 Presidential elections, I was asked what the next administration should prioritize. I said, “power generation projects should be one of the priorities of the next administration.” I also said that “the government must move faster to catch up with the rising demand for power, and that to achieve this, we must have foresight and a long-range view.”

 

Nine years hence, the power sector continues to be one of the most challenged sector of the Philippine society.

 

The ERC has a major role in reversing the situation. Believe in this, because change starts with believing.

 

Public servants have always been around, serving governments of the day. Critics, on the other hand, will always be around for personal considerations or for the public good.

 

To this, I say, find wisdom in what Winston Churchill once said, and I quote: “Criticism may not be agreeable, but it is necessary. It fulfills the same function as pain in the human body; it calls attention to the development of an unhealthy state of things. If it is heeded in time, danger may be averted; if it is suppressed, a fatal distemper may develop.”

Never think that you are persecuted whenever you are contradicted. On the other hand, be thankful that you remain to be relevant.

Being a public servant myself, I firmly believe that impartiality, integrity and professionalism need to run through the heart and soul of every public servant.

 

The world we know today has profoundly changed since the day Congress passed EPIRA eighteen years ago.

 

These trends are changing the landscape and are creating new challenges and opportunities. These are mirrored in the realities we face today, including – changing demographics, punctuated by increasing population levels; ever-rising urbanization; climate change realities and scarcity in resources; and the technology revolution that, of late, has had the greatest impact on our lives.

 

All these have an impact on the power sector. These realities need to be seriously integrated in the country’s energy planning. To do otherwise would be governance with no direction.

 

There are disruptive technologies and disruptive innovation, as there are, I am sure, disruptive Chairperson or disruptive Commissioners of the ERC.

 

There is nothing wrong with these and with them. We should, in fact, embrace disruptive innovation in our processes, technologies, and in the way we think.

 

The Theory of Disruptive Innovation, according to a Harvard Business Review article[1] is praised by “many leaders of small, entrepreneurial companies, as well many executives at large, well-established organizations, as their guiding star.”[2]

 

How can this be applied in the context of ERC’s work?

 

One cannot help but be overwhelmed by the plethora of information and data that accompanies each rule-making, dispute resolution, or rate setting process. I have had my own taste of being overwhelmed by documentations, position papers and proposals. Believe me, half of the things you need to see, you do not see in the documents that are submitted to you. You need to ask the right questions.

 

Learn to decipher what you do not see. Be discerning.

 

ERC has had more than eighteen years of diverse experiences. Learn from ERC’s past decisions and its history; but do not be stifled by the past.

 

On April 17 of this year, President Rodrigo Duterte signed into law Republic Act 11293 or the Philippine Innovation Act. It mandates government agencies to “adopt a broader view in developing its innovation goals and strategies covering all potential types and sources of innovation,” including innovation in government processes and outcomes for the publics we serve.

 

Do not reject disruptive processes that drive you out of your comfort zone and into a new approach at looking at things. Do not abandon the potential of new technologies and ideas even before you have discovered its value. That is not innovation.

 

On the other hand, be willing to ask questions, for the moment you stop asking the right questions would be the moment you would become the complacent regulator.

 

Welcome questions and be prepared to answer them, even when it is inconvenient to do so.

Respect the opinions of all who intervene in regulatory matters. Reject unwarranted “guidance,“ even though such defiance may come at a personal cost.

 

That is the courageous regulator.

 

Of late, I have seen news articles, bearing recent decisions and directives of the Commission. The headlines blare the following messages:

 

  • “ERC Looking at Penalizing Generation Companies for Forced Outages”[3]
  • “ERC Issues Refund Order to Power Distributors”[4]
  • “One Billion Pesos in Refund Awaits Meralco Consumers”[5]

 

Over a period of one month, ERC had ordered the refund of nearly two billion pesos to consumers.

 

That is a gallant feat!

 

It is a great way of ushering in ERC’s 18th year of existence.

 

Do not expect people to notice. On the other hand, expect harder questions to come your way. It is that time of the year once again when you have to face legislators in defense of your budget. You know the drill. The good part is you have the answers.

 

Earlier, I asked if you would let the scathing headlines define who you are as a public servant and as an institution. Clearly, you have chosen the path of a newsmaker.

 

While your good work may not find its way into the front pages of dailies, take comfort in the fact that you are able to deliver outcomes that impact on the lives of people.

 

Be the innovative, courageous, fair, and independent regulator who serves as the first line of defense, not just for our consumers, but for everyone.

 

Our realities have changed and the ERC needs to be prepared to develop and implement regulations and processes to meet evolving needs. This is your greatest challenge.

 

Again, congratulations, for reaching this milestone.

 

Thank you.

 

[1] https://hbr.org/2015/12/what-is-disruptive-innovation, Harvard Business Review, accessed August 12, 2019.

[2] https://hbr.org/2015/12/what-is-disruptive-innovation, accessed 10 August 2019.

[3] https://www.gmanetwork.com/news/money/companies/693143/doe-erc-looking-at-penalizing-generation-companies-for-outages/story/, May 2, 2019

[4] https://www.bworldonline.com/erc-issues-refund-order-to-12-power-distributors/

[5] https://www.philstar.com/business/2019/08/10/1942000/wesm-operator-ordered-refund-p2-b-customers