The Energy Regulatory Commission (ERC) has issued show cause orders (SCOs) against 40 generation companies for failing to comply with mandated fuel audit requirements, citing violations of Section 43 of the Electric Power Industry Reform Act of 2001.
ERC chairman Monalisa Dimalanta confirmed the sanctions Monday, stressing the need for timely submission of fuel invoices to justify pass-through costs charged under power supply agreements (PSAs). “If there is no basis for the passing on of costs, those costs cannot be charged or will need to be refunded… Plus, there could be administrative fines,” Dimalanta said.
The infractions relate to audit periods from January to October 2022 when energy prices spiked due to the Indonesian coal export ban and the war in Ukraine. While the commission declined to name the non-compliant firms, Dimalanta said that fuel audits are crucial for validating the cost elements passed on to consumers.
The ERC, acting in its quasi-judicial capacity, has not set a timeline for the resolution but indicated possible penalties for both gencos and distribution utilities found in breach of audit rules.
