The Energy Regulatory Commission (ERC) has ordered 40 generation companies (gencos) to explain their failure to comply with the requirement to submit complete documents and data for fuel audit in 2022.
The regulatory body said that as of Monday, it has started issuing show-cause orders (SCOs) to gencos for failing to submit fuel data for the audit period of January to October 2022, in violation of section 43 of the Electric Power Industry Reform Act of 2001 (EPIRA).
Under the EPIRA’s section 43, the ERC regularly does fuel audits to promote competition, encourage market development, ensure customer choice andpenalize abuse of the market in the restructured electricity industry.
ERC chair Monalisa Dimalanta said in a message to reporters the agency took action in compliance with the EPIRA law requirement for the monthly submission of fuel invoices to support the pass-through fuel costs incorporated in genco billings.
“The distribution utility (DU) needs to verify if the pass-through costs such as volume, price and efficiency rates are within the formula and cap allowed by the commission in the order or decision approving the implementation of the PSA (power supply agreement),” Dimalanta said.
“If there is no basis for the passing-on of costs, those costs cannot be charged or will need to be refunded if already charged to consumers. Plus, there could be administrative fines imposed on both DUs and gencos,” she added. The ERC declined to say how big the fines could be because the rates would depend on the findings of each case.
Dimalanta added the ERC issued such SCOs especially since coal and gas prices increased in 2022, arising initially from the coal export ban imposed by Indonesia, and as an effect of the war in Ukraine.
“Since coal and gas fuel around 80 percent of power plants in our system, this led to significant increases in power bills at that time because of the fuel pass-through arrangement under PSAs,” she further said.
However, the ERC did not name the gencos slapped with the SCOs nor did it say the timeline for the resolution of the issue.
The ERC operates as a quasi-judicial body, mainly deciding on applications and cases bound to affect power rates in the country.
The ERC said a manpower shortage in the commission has led to a heavy backlog of cases at the ERC, and has been the reason why the quasi-judicial body has just started addressing cases of fuel audit compliance failures from 2022.
The ERC said that as of the end of 2024, the total number of cases filed with the regulatory body was at 9,893, with 6,876 resolved, for a resolution rate of 69.50 percent. However, the ERC said 3,017 or 30.5 percent, have been pending for resolution as of May 12.
