The Department of Energy (DOE) has launched a regulatory crackdown on 175 power generation companies (gencos) by issuing show-cause orders that could lead to the suspension or cancellation of their permits if they fail to explain alleged operational and compliance violations.

At a media briefing on Monday, DOE legal counsel Gabriel Corpuz said the notices were issued to 164 on-grid and 11 off-grid gencos.

Corpuz said the firms either failed to submit mandatory compliance reports or were flagged for repeated forced outages, prolonged capacity deratings, and failure to deliver contracted power. The DOE said these lapses contributed to rotational brownouts and a tighter power supply in several parts of the country.

The enforcement action follows the implementation of Department Circular No. 2026-02-0006, or the Policy on Accountability of Entities Engaged in Power Generation. 

The policy requires power producers to regularly report whether they meet their operational commitments and technical standards, and to submit corrective action plans for any deficiencies.

"They are given the chance to explain also. That's why there is a show-cause order. They are not guilty because there is a show-cause order," Corpuz said.

However, he warned that companies failing to justify their violations face penalties ranging from cease-and-desist orders and disqualification from government power supply auctions to, in the most serious cases, the loss of their authority to operate.

"The ultimate penalty... is more like the cancellation of your permit to operate as a gene," Corpuz said.

Energy Secretary Sharon S. Garin, meanwhile, said any decision to revoke a generator's permit would be made only after due process and with safeguards to ensure consumers continue receiving uninterrupted electricity.

"If we decide to cancel any permit, that will not be done hastily. It will be done at the forefront. Consumers need to be protected first. Make sure that the consumers have electricity day in and day out," Garin said.

The affected companies are spread across the country's three major grids, with roughly 60 to 80 in Luzon, around 40 in Mindanao, and about 20 in the Visayas.

Garin said the issuance of the show-cause orders is only the first step to tighten oversight of power producers, adding that the DOE has also identified other compliance issues, including failures to maintain the required fuel inventories.

"These gencos didn't comply. But I have to emphasize that this is just a start," Garin said.

"We will enforce the rules on this. Because, as we have seen what's happening in Visayas, our consumers cannot afford any minute of interruption, especially for island off-grid areas. Because they're the only ones providing power there, they don't have a grid," she added.

Although power generation is no longer classified as a public utility, Corpuz said it remains a public service subject to government oversight under the Public Service Act. 

The new accountability policy is intended to ensure generators deliver the capacity they have committed and reduce the risk of outages that disrupt electricity supply for consumers and businesses.