ERC fines 4 distribution utilities for failure to submit DDP

by Lenie LecturaJuly 31, 2016

from Business Mirror

FOUR distribution utilities (DUs) were penalized by the Energy Regulatory Commission (ERC) for failure to submit the five-year Distribution Development Plan (DDP).

First Bay Power Corp. Inc. (FBPC), Albay Electric Cooperative Inc. (Aleco), Abra Electric Cooperative Inc. (Abreco) and Maguindanao Electric Cooperative Inc. (Magelco) were ordered to pay P50,000 each as provided for in Section 46—Fines and Penalties of the Electric Power Industry Reform Act (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 Salazar said. The ERC initially issued a show-cause order (SCO) to the said DUs for their failure to comply with the submission of the DDP.  They were directed to explain why no administrative penalty should be imposed upon them.

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 DDP is the document being prepared and updated by the Department of Energy annually that details the DUs programs on their acquisition of subtransmission assets, expansion and rehabilitation of distribution facilities, and the costs associated with 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 the ERC in its review of the DUs’ capital expenditure applications and facilitates fulfillment of the ERC’s mandate of ensuring reasonable power rates.

The ERC is empowered under RA 9136, otherwise known as the Epira, particularly in Section 43 (l) thereof, to impose fines or penalties for any noncompliance 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 five-year distribution plan to the DOE not later than March 15 every year, for its integration with the Power Development Program and Philippine Energy Plan.