The Energy Regulatory Commission (ERC), the regulator of the heavily-regulated power industry in the Philippines, may be entering into a new era seeking better benefits to stakeholders, especially the consumers.

In information obtained recently, there is an idea pushed within the commission about the reshaping of the ERC landscape.

The idea was presented as an offshoot of the principles forwarded by consumer group P4P Coalition, which articulated its perspectives on various issues within the power sector. 

ERC has been welcoming the stand of certain stakeholders, especially the consumer groups.

In a press release dated Sept. 19, 2025, the P4P Coalition stated: “We are disappointed that Chair Saturnino Juan’s first order of business as new ERC chief is to cede ground to power players, enabling them to raise prices as they please at the expense of ordinary Filipinos. Protecting consumers’ interests is not an optional duty for the ERC. It is its primary mandate – and part of that responsibility is scrutinizing these contracts to prevent abuses and ensure least cost electricity,” P4P Convenor Gerry Arances said.

The ERC addressed the issues raised by the coalition, based on information relayed on Sept. 25, 2025.

The regulator said it is entering a new era especially when it comes to power service agreements (PSA), and this era is characterized by two pivotal developments in the regulatory framework: the Department of Energy’s (DOE) Competitive Selection Process (CSP) Policy and the Supreme Court’s landmark decision in Alyansa ng Bagong Pilipinas vs. ERC.

Such matters are seen by the ERC as a compelling call to re-embrace the competitive principles that are fundamental to the Electric Power Industry Reform Act (EPIRA).

The commission said that in the new era, the ERC’s role is not diminished but transformed. 

ERC’s mandate is clearer and more critical than ever: to be the guardian of the competitive process and the guarantor of its integrity.

Moreover, CSP is there to fulfill EPIRA’s pro-competitive mandate.

CSP is a transparent, public, and competitive bidding where Distribution Utilities (DU) seek the least-cost power supply.

Furthermore, CSP enables fair market price through the forces of supply and demand, not through closed-door negotiations. 

Thus, the ERC’s primary duty in its rate-setting function must be to uphold the outcomes of a genuinely competitive CSP.

Competitive Selection Process

When the CSP is done properly, the resulting price is not just a number offered by a generator, the ERC said. The CSP answers the question of “What is the least-cost power available today?”

The CSP comes up with a price validated by the process itself. To second-guess this outcome and unilaterally reduce the contracted rate under the guise of regulatory review risks undermining the idea of having a competitive market and results in uncertainty that discourages the very investment the industry needs.

This tells investors: “You competed and won fairly, but the goalposts may still move during the PSA review process at ERC.”

Therefore, it will not protect consumers but will cause harm to consumers by discouraging investment. As a result, it may impact future supply and may harm the long-term reliability and affordability of power supply in the Philippines.

ERC said it should not rubber-stamp every PSA but must ensure that the CSP is done correctly. Moreover, the ERC should ensure the process was fair and costs are just.

In this regard, the balanced approach is the essence of EPIRA. It harmonizes two pillars:

1. Promoting Competition: Through enforcing the CSP, the market discovers the least-cost price for consumers.

2. Ensuring Cost Recovery: By upholding the results of a fair CSP, investors who take massive risks can recover their just and prudent costs, securing a reliable and modern grid for the future.

The ERC’s call to stakeholders is to compete fiercely, innovate constantly, and invest confidently in the knowledge that a fair process will yield a fair and enforceable outcome.

The ERC believes the greatest shield against high prices is not the discretionary power of a regulator to cut a single contract, but the relentless, ongoing pressure of a competitive market.

Thus, ERC positions itself as the steadfast guardian of the competitive process.