The Energy Regulatory Commission (ERC) responded to a complaint filed by the National Association of Electricity Consumers for Reforms, Inc. (NASECORE) before the Office of the Ombudsman against ERC Chairperson Francis Saturnino Juan and the four Commissioners, concerning the treatment of “Line Rental” charges in electricity bills.
The Commission welcomed the opportunity to explain its position, both to the public and, in the proper forum, to the Ombudsman itself.
“The law places the power to review the Commission’s actions with the Court of Appeals and the Supreme Court, and we welcome that scrutiny,” Juan said.
“We remain confident that our processes are grounded in law, and we are ready to have that record examined by any appropriate body.”
“We take consumer concerns seriously. That is why we have already answered NASECORE’s questions in writing, in detail, not once but twice. We remain confident that our processes are grounded in law, and we are ready to have that record examined by any appropriate body,” he added.
What Is Line Rental?
“Line Rental,” now more precisely called the Bilateral Line Loss and Congestion Cost (Bilateral LLCC), is not a fee that the ERC, the market operator, or any distribution utility invented on its own. It is a standard feature of the Wholesale Electricity Spot Market (WESM), the government-established system that prices electricity based on where in the grid it is generated and consumed.
Electricity generated in one place and consumed in another loses value along the way, largely because of transmission losses and congestion on the lines carrying it. When a distribution utility or electric cooperative buys power under a contract with a generator, the price at the point where the power is produced and the price at the point where it is delivered can differ.
Line Rental is simply the settlement adjustment that accounts for that difference. It is not a separate charge added on top of a consumer’s bill. It is mathematically part of the Energy Trading Amount that a distribution utility or electric cooperative already pays the WESM, which in turn becomes part of the Generation Charge on a consumer’s bill, alongside all other generation costs.
How the ERC Verifies These Charges
Distribution utilities and electric cooperatives are required to submit their generation cost computations to the ERC every month, including supporting WESM billing records. The Commission then compares what a utility actually collected against what it should have collected, and orders a refund to consumers or an additional collection, as warranted. Every three years, utilities must also file a consolidated application covering this same period for the Commission’s confirmation.
Line Rental, as one component of a utility’s overall generation cost, is reviewed through this same continuing process, the same way individual contracts and market transactions that make up a utility’s costs are not each given their own separate case, but are all examined as part of this regular verification.
The ERC’s Responses to NASECORE’s Letters
The Commission had already responded to NASECORE’s concerns on this issue well before the Ombudsman complaint was filed — in writing, on 13 July and again on 4 August 2026 — addressing each of the group’s questions on the legal basis, verification process, and billing treatment of Line Rental.
More importantly, the Commission’s own review of the matter found real problems worth fixing, particularly in the Visayas, where transmission constraints were producing unusually high Line Rental charges.
Acting on those findings, the ERC approved corrective measures on 13 August 2026: it suspended the collection of Line Rental charges under the specific circumstances that caused these price distortions, adopted a longer-term method for calculating these charges correctly going forward, and directed the Independent Electricity Market Operator of the Philippines (IEMOP) to hire an independent auditor and recompute the related market settlements all the way back to 26 June 2021. That audit will determine the actual financial impact on affected utilities and consumers, and will form the basis for any refund or adjustment found to be warranted.
The Commission is also reviewing how Line Rental and similar cost components can be explained more clearly to consumers.
The Commission is also reviewing how Line Rental and similar cost components can be explained more clearly to consumers, including NASECORE.
On NASECORE’s Demands
The ERC recognizes NASECORE’s long record of advocacy for electricity consumers and shares its goal of a transparent, fairly priced power sector. That is why the Commission has taken NASECORE’s letters seriously and responded to them point by point, and why it has already acted on the underlying concern by ordering the corrective measures and independent audit described above.
At the same time, a few of what NASECORE has asked of the Commission go beyond what any single stakeholder, however genuine its concerns, may unilaterally require or demand of an independent regulator. Some of the records requested involve confidential market data that the ERC is bound by its own rules to protect from disclosure outside the proper process. And treating a deadline that NASECORE itself has set as grounds for possible criminal or administrative liability does not reflect how an independent, quasi-judicial body such as the ERC is meant to operate: its decisions are tested through the record, the law, and the courts, not by a private party’s self-imposed timeline on ERC.
This does not close the door on NASECORE’s concerns. The group remains free to raise specific, documented questions about any utility’s charges, to participate as an intervenor in the Commission’s public rate and confirmation proceedings, or to seek judicial review of any ERC action before the Court of Appeals and the Supreme Court, as provided by law. These channels remain fully open, and the Commission will continue to engage NASECORE through them in good faith.
On the Ombudsman Complaint
The ERC respects NASECORE’s right to pursue whatever legal or administrative remedies it deems appropriate, including this complaint, and will cooperate fully with the Office of the Ombudsman in accordance with the applicable rules and procedures.
The Commission is confident that its actions on this matter are grounded in law, in the WESM Rules, its duly published rules, and in a functioning, continuing system of verification and, as official acts of a regulatory body, carry the presumption of regularity.
The ERC remains committed to ensuring that the costs passed on to electricity consumers are proper, reasonable, and consistent with the law, and to working with NASECORE and all stakeholders toward that shared goal.
