ERC penalizes delinquent DUs

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Energy Regulatory Commission (ERC) has imposed penalties on four distribution utilities (DUs) after their failure to submit the required annually submitted 5-year Distribution Development Plan (DDP).

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The commission said that after a thorough investigation and the observance of due process, it resolved to impose penalties on First Bay Power Corporation, Inc. (FBPC), Albay Electric Cooperative, Inc. (ALECO), Abra Electric Cooperative, Inc. (ABRECO), and Maguindanao Electric Cooperative, Inc. (MAGELCO).

ERC received a letter from the Department of Energy (DOE) in June 2015 requesting the issuance of a Show Cause Order (SCO) to the aforementioned DUs for their failure to comply with the submission of the DDP.

SCOs were issued to the erring DUs directing them to submit their respective explanations on why no administrative penalty should be imposed upon them.

The DDP is the document prepared and updated by the DOE annually that details the DU programs for acquisition of sub-transmission assets, expansion and rehabilitation of distribution facilities, and the costs associated with these activities in order to deliver the electric power services to the projected number of customers, and their corresponding energy and demand requirements.

The DDP helps ERC in its review of the DUs’ capital expenditure applications and facilitates fulfillment of ERC’s mandate of ensuring reasonable power rates.

RA 9136 or Electric Power Industry Reform Act of 2001 (EPIRA), particularly Section 43 (l), empowers the ERC to impose fines or penalties for any non-compliance with or breach of the EPIRA, its Implementing Rules and Regulations (IRR), and the rules and regulation that the ERC promulgates or administers.

The liable DUs violated Rule 7, Section 4(p) of the IRR of the EPIRA, which required the preparation and submission of an annual 5-year distribution plan to the DOE not later than the 15 of March of every year, for its integration with the Power Development Program (PDP) and Philippine Energy Plan (PEP).

In the case of the ECs, such plans are being submitted through the National Electrification Administration (NEA) for its review and consolidation before it submits the to the DOE through the National Electric Cooperatives Distribution Development Plan.

Upon receipt and consideration of their respective explanations, the ERC found no justifiable reason to absolve FBPC, ALECO, ABRECO and MAGELCO from the imposition of penalty.

The erring DUs were ordered to pay the amount of P50,000 each as provided for in Section 46—Fines and Penalties of the EPIRA.

“The ERC, under its investigation and enforcement function, will see to it that every stakeholder complies with all the relevant laws and directives issued by the ERC to promote and protect the long-term interests of the consumer,” ERC Chairman Jose Vicente B. Salazar said on Friday.

Meanwhile, the ERC expressed its support for the recent pronouncement made by the DOE Secretary Alfonso G. Cusi on his move to lower power rates.

“We will fully support any DOE initiative aimed at reducing electricity rates and will implement national government policies consistent with our mandate to set the rates and protect the interest of the consumers,” Salazar said.

He assured the electric power industry, especially the electricity consumers, that the ERC is finding ways and means to guarantee that only just and reasonable costs gets into their electricity bill.

An opportunity for such is found in the petition filed by the Power Sector Assets and Liabilities Management Corporation (PSALM) to recover some P27.7 B of the National Power Corporation (Napocor)’s stranded debts portion of the Universal Charge for the Luzon, Visayas, and Mindanao grids for CY 2015.

The ERC is closely scrutinizing the matter and will still have to undergo due process before it can finally render its decision on the case, Salazar said.

“The ERC is studying the case meticulously and with a lot of caution since the petition is for pass-on charges. The case will have to be evaluated on the basis of reasonableness and affordability,” he added.

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