ERC fines Cebu power utility

by Myrna Velasco – January 26, 2016

from Manila Bulletin

A power distribution firm servicing customers in Cebu had been slapped with fines for failure to submit its 2003 annual report and the mandated business separation and unbundling plan.

The penalty enforced against Mactan Electric Company (MECO) amounted to P55,658,600 “for willful and deliberate violations of existing laws, rules and regulations and orders/decisions of the Commission,” according to the Energy Regulatory Commission (ERC).

Violations of such nature – mainly non-filing of requirements – have actually been prevalent and many players were already meted with the same set of penalties in the past. Some players have reformed along the way.

Nevertheless, ERC chairman Jose Vicente Salazar is reiterating his warning to industry players that “the Commission will hold accountable any power utility whose acts clearly result in clear disadvantage to customers.”

ERC expounded that “MECO was penalized for failure to submit its 2003 annual report and for failure to comply” with a Commission’s order on the BSUP submission.

MECO was similarly penalized, according to the ERC, for including the retail rates in power supply contract costs “without prior approval from the Commission.”

The ERC added it imposed “substantial penalties because, based on records, MECO had the propensity to breach the Commission’s rules and regulations as demonstrated by the number of violations committed.”

The Commission said it wants to lay the groundwork that “this recent move to impose severe penalties on MECO should convey to the industry the ERC’s strong resolve to ensure that laws, rules and regulations are complied with.”

Beyond setting a keen eye on violations of relevant power industry players though, being awaited from the ERC are firmer regulatory frameworks that shall set the sector’s future pathway.