Gencos face sanctions over fuel gaps

The Energy Regulatory Commission (ERC) has identified power generators — including units of energy giants Aboitiz Power, San Miguel Corp., and DMCI Power — who failed to turn over key fuel documents tied to electricity charges passed on to consumers.

“The ERC continues to conduct rigorous fuel audits to make sure that only fair and reasonable costs are being charged by our regulated entities,” ERC Chairperson and CEO Monalisa C. Dimalanta said on Wednesday.

“We owe it to the Filipino consumers to protect them from unnecessary charges and ensure that they’re not paying more than they should for electricity.”

In a wave of show-cause orders (SCOs), the ERC demanded explanations from the generation companies for ignoring its previous directives to submit complete fuel cost records covering January to October 2022.

The regulator pointed out that the data is crucial for validating whether power firms are charging fair and lawful rates under their supply deals with distribution utilities.

Forty SCOs were served to 37 power generators, including firms owned or affiliated with major players like San Miguel Corp., Aboitiz Power, DMCI, and Nickel Asia. Among them are San Miguel Energy Corp., SMC Consolidated Power Corp., Therma Luzon, Masinloc Power Partners, DMCI Power, GNPower Dinginin, Toledo Power, and KEPCO SPC.

Smaller and regional players such as Anda Power, Calamian Islands Power, Peakpower group companies, and Siquijor Island Power were also included.

The companies have 15 days to submit the missing documents and justify why they shouldn’t face penalties. If they fail to provide a sufficient basis for the fuel costs, the ERC said the charges must be disallowed — or refunded if already billed.

“We remind GenCos and DUs to fully cooperate and comply with these requirements, so we can uphold transparency and deliver power at the least cost possible,” Dimalanta added.

Reacting to the development, DMCI Power said it has yet to receive an official copy of the order but promised full cooperation.

“(We) are in the process of verifying from their records the alleged non-compliance with the ERC directive. We remain fully committed to regulatory compliance and transparency in our operations and will cooperate with the ERC to address the matter accordingly,” the company said.

AboitizPower likewise said it will verify the order. As of press time, the other companies named by the ERC have yet to issue their comments.

Fuel invoices are a key part of ERC’s checks, as they allow distribution utilities to verify whether power producers are sticking to approved cost formulas and efficiency benchmarks.

Under the Electric Power Industry Reform Act, failure to comply may result in administrative sanctions, including possible fines for both generation companies and their distribution partners.