ERC slaps penalties on Aleco, 3 other electric cooperatives

by Alena Mae S. Flores – July 29, 2016 at 11:15 pm

from Manila Standard Today

The Energy Regulatory Commission said Friday it imposed penalties on four distribution utilities that failed to submit the required five-year distribution development plan.

ERC said it imposed the penalties on First  Bay Power Corp. Inc., Albay Electric Cooperative Inc., Abra Electric Cooperative Inc. and Maguindanao Electric Cooperative Inc. after a thorough investigation and observance of due process.

ERC said upon receipt and consideration of their respective explanations, it found no justifiable reason to reconsider the imposition of penalties.

The distributors were ordered to pay P50,000 each as provided for under Section 46 of Electric Power Industry Reform Act of 2001.

ERC chairman Jose Vicente  Salazar said under its investigation and enforcement function, the regulator would see to it that every stakeholder complied with all relevant laws and directives to promote and protect the long-term interests of the consumer.

The distribution development plan is a document being prepared and updated by the Energy Department annually that details the distribution utilities; programs on their acquisition of sub-transmission assets, expansion and rehabilitation of distribution facilities and the costs associated to these activities.

DDP helps ERC in its review of the distribution utilities’ capital expenditure applications and facilitates fulfillment of ERC’s mandate of ensuring reasonable power rates.

ERC received a letter from the department in June 2015 requesting the issuance of a show cause order to the four distribution firms for their failure to comply with the submission of DDP.

The orders were issued to erring DUs directing them to submit their respective explanations on why no administrative penalty should be imposed upon them.

ERC is empowered under Republic Act No. 9136 or the Epira law.  It said the  distribution firms violated rule 7 under Section 4(p) of the IRR of Epira, which required the preparation and submission of an annual five-year distribution plan to the department not later than the 15th of March of every year.

Meanwhile, the Energy Department said it would look into the viability of the operations of Albay Electric Cooperative Inc. more than two years after it was turned over to San Miguel Corp.

Energy Department spokesman Pete Ilagan told reporters the audit task force would review the operations of Aleco.

“That would be a subject of the task force effort, and we will be waiting for the report of the task force audit. We asked for the documents and review their contract. We need to know the situation right now, so we will be able to understand why it reached that situation,” Ilagan said.