Line Rental Charges Now Reach ERC’s Own Commissioners

What It Means

• NASECORE has filed an Ombudsman complaint over line rental charges against ERC Chair Francis Saturnino Juan and four commissioners, covering how the charges were billed to Eastern Visayas electric cooperatives.
• The disputed amount is P1.55 billion collected across the region from January to July 2026, with Leyte II Electric Cooperative alone accounting for P75.03 million in 2025.
• The ERC ordered its own corrective measures on August 13, three weeks before the complaint was filed, after tracing the charges to a pricing flaw in the wholesale electricity market.
• The audit the ERC ordered reaches back to June 26, 2021, which means the exposure extends past five named officials and into every cooperative that billed under the same formula.
• No finding of probable cause has been made against any of the named officials.

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Electricity bills in the Philippines carry a cost most consumers never see itemized. Line rental charges, the fee that covers grid losses and transmission congestion, get folded straight into the generation charge instead of appearing as their own line item. That structure is now the subject of an Ombudsman complaint against the head of the agency that allowed it.

Line Rental Charges Skip Their Own Rate Proceeding

Line rental, formally called the Line Rental Trading Amount or Bilateral Line Loss and Congestion Cost, is not a tariff the ERC approves the way it approves a distribution rate. Utilities calculate it monthly and pass it through as part of generation cost. Over-recoveries or under-recoveries get adjusted in a later billing cycle. There is no separate hearing, no public docket, no line on the bill that says “line rental.” The ERC has said this treatment does not require a distinct rate case because line rental is a cost pass-through, not a rate.

NASECORE’s complaint does not dispute that legal framing outright. It disputes whether the self-reported monthly numbers were ever actually checked. “The existence of rules and monthly verification inputs is not proof that verification was timely, complete, or effective,” the group told the Ombudsman. That is a narrower and harder claim to dismiss than “the charge is illegal.” It is a claim that nobody can prove the math was audited before it hit a customer’s bill.

The Pricing Model Broke At The Grid’s Tightest Point

The root cause turned out to be technical, not administrative. The Wholesale Electricity Spot Market miscalculated the congestion component of electricity prices whenever the high-voltage direct current links connecting Luzon, Visayas and Mindanao hit their transmission limits. Instead of reflecting congestion as an added cost on top of a shared baseline, the pricing model generated separate baseline prices for the affected regions, which distorted the line rental computation across the board. Visayas bore the brunt because its interconnections constrain most often.

The distortion was not small. Some consumers saw electricity bills rise by P2.00 to P5.99 per kilowatt-hour because of the erroneous pass-through, according to figures cited by House Minority Leader Marcelino Libanan.

Eastern Visayas Carries The Documented Weight

The Federation of Rural Electric Cooperatives in Region 8, representing 11 cooperatives across Eastern Visayas, put the regional total at P1.55 billion in line rental charges from January to July 2026. Leyte II Electric Cooperative’s individual numbers, P75.03 million in 2025 and another P2.96 million from January to April 2026, are the closest thing to a documented case study inside that regional figure. NASECORE’s complaint leans on Leyte II because its line rental charges are the most traceable single record inside the regional total, which is also why the group argues the broader P1.55 billion in line rental charges deserves the same scrutiny.

The ERC Moved Before NASECORE Filed

The sequence matters more than the complaint alone. Libanan raised the line rental issue at an August 11 House Committee on Energy hearing, citing a complaint from Eastern Samar Electric Cooperative. Two days later, ERC Chair Juan announced a two-pronged order: a temporary freeze on the affected line rental charges and a directive to the Independent Electricity Market Operator of the Philippines to correct the pricing methodology at its root. Any funding gap created by the freeze gets billed to customers in the higher-priced region based on usage, not absorbed silently elsewhere.

NASECORE filed its Ombudsman complaint on August 31, eighteen days after that order was already in motion. The complaint does not accuse the ERC of inaction. It accuses the ERC of not proving the years before that order were handled correctly, and it asks whether past charges should be recalculated and refunded rather than just corrected going forward.

The Audit Reaches Back Five Years

The ERC’s own audit already covers market settlements from June 26, 2021 onward. IEMOP has 30 calendar days from the order to implement the interim suspension, and it must submit a proposed refund or adjustment timeline once the audit concludes. That lookback window is the real structural fact in this story. A five-year audit built to check one region’s billing becomes a methodology that applies to any distribution utility or cooperative that priced line rental charges the same way over the same period.

That is where the exposure actually sits. The five named commissioners face an Ombudsman process with no finding against them yet. Every electric cooperative outside Eastern Visayas that billed line rental charges under the same unitemized, self-reported formula since 2021 faces something more durable. The audit built to check one region’s line rental charges is the template for checking everyone else’s.

More developments that reshape the operating environment in National Signal section of Hemos PH.