Republic of the Philippines


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ERC penalizes delinquent DUs

The Energy Regulatory Commission (ERC), after a thorough investigation and the observance of due process, resolved to impose penalties on four (4) distribution utilities (DUs) namely: First Bay Power Corporation, Inc. (FBPC), Albay Electric Cooperative, Inc. (ALECO), Abra Electric Cooperative, Inc. (ABRECO), and Maguindanao Electric Cooperative, Inc. (MAGELCO) for their failures to submit the required annually submitted 5-year Distribution Development Plan (DDP).

The DDP is the document being prepared and updated by the DOE annually that details the DUs programs on their acquisition of sub-transmission assets, expansion and rehabilitation of distribution facilities, and the costs associated to 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.

The ERC received a letter from the DOE in June 2015 requesting the issuance of a Show Cause Order (SCO) to the afore-mentioned 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 ERC is empowered under R.A. 9136 otherwise known as the Electric Power Industry Reform Act of 2001 (EPIRA), particularly in Section 43 (l) thereof, 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 Department of Energy (DOE) not later than the fifteenth (15th) 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 to same 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 PhP 50,000.00 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 stressed.  


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