The Energy Regulatory Commission (ERC) has identified certain power producers for possible sanctions after they failed to turn over documents regarding 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,” according to ERC chairperson and CEO Monalisa Dimalanta.

“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,” she added.

In a wave of show-cause orders (SCO), 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 on 37 power generators, including firms owned or affiliated with major players.

Smaller and regional players were also included. The companies were allowed 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.

Among the documents ERC sought are fuel invoices, which are vital to ERC’s regulatory checks. They allow distribution utilities to verify whether power producers are adhering to approved cost formulas and efficiency benchmarks.

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

Emerald Bay ownership clash

PH Resorts Group Holdings, led by Dennis Uy, has been placed in a precarious position as it contests a bank’s plan to sell its 12.3-hectare Emerald Bay property in Mactan, Cebu.          

PHR insists its 2023 transaction with Chinabank was a financing arrangement rather than a sale, relying on a lapsed buyback option and ongoing negotiations for a new repurchase deal.

The bank, however, holds legal ownership and appears ready to capitalize on the property’s value, leaving PHR with limited leverage.

The Uy company is betting on a partnership with EEI Corp. to turn its fortunes around, but this is uncertain given PHR’s history of failed deals and financial distress.

PHR’s argument of a financing arrangement is technically plausible under International Financial Reporting Standards (IFRS) if the option significantly restricts the bank’s control.

However, the expiration of the option takes the sting out of this PHR position. PHR’s continued recognition of the asset may face audit challenges, mainly if Chinabank proceeds with a sale.

The bank holds the upper hand in a looming court battle as it legally owns the property and is not obligated to renew the buyback option.

The P1.5-billion increase in price may be a negotiation tactic to pressure PHR or it may reflect genuine costs, but it has strained their relationship.

PHR’s pushback reflects its desperation to retain control of its flagship project. Without new funding or a renegotiated deal, PHR risks losing the property and facing further financial collapse.

An MoU with EEI is a potential lifeline but its non-binding nature and PHR’s track record of failed partnerships temper any optimism.

The Emerald Bay project was meant to position Cebu as a premier gaming and tourism destination outside Metro Manila.