ERC suggests turning penalties into reimbursements to customers

ERC proposes conversion of fines into customer refunds
ERC proposes conversion of fines into customer refunds | Image Credit: CNBC –

The Energy Regulatory Commission (ERC) wants to use fines that companies in the power business that violate the law to reimburse customers who lost electricity.

This was the Electric Power Industry Reform Act (EPIRA) of 2001, Republic Act 9136, as amended by the ERC as part of its ongoing investigation into the four-day extensive outage that afflicted Western Visayas early this month.

In a press release on Friday, the ERC said its chairman and CEO Monalisa Dimalanta proposed the suggestion during the congressional investigation into the region-wide power outage at the House of Representatives on Thursday.

The EPIRA grants the ERC the authority to fine power industry participants between P50,000 and P50 million for infractions.

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However, the National Treasury is receiving the fines that the power industry regulator has collected, adding to the state’s financial reserves.

“To be precise, one of our suggestions for the EPIRA amendment is to grant ERC the power to mandate the imposition of penalties for returns, in the form of discounts or refunds, to the customers who experienced the inconvenience or the infraction that caused the service to be interrupted,” Dimalanta stated.

We don’t currently have the authority. However, we can use that authority to submit the application if the law is amended, the ERC head continued.

Following many power plant outages, Panay Island experienced a severe power outage during the first week of 2024.

The National Grid Corporation of the Philippines was held accountable by both President Ferdinand Marcos Jr. and Energy Secretary Raphael Lotilla. They noted that the grid operator could have averted a system collapse if it had taken action during a two-hour window to implement rotational brownouts or manual load dropping to preserve the integrity of the island’s power grid.

In reply, the NGCP maintained that its actions followed protocol and that the system was normal prior to the power plant units tripping many times.

But two hours later, six more massive units fell one after the other, bringing down the system as a whole.

According to the ERC, it took a proactive stance after the Panay power outage and required hourly information from the grid operator, as opposed to the traditional four-hour intervals.

The regulator for the power sector has started looking into the event on its own.

The ERC had previously stated that it would take the organization six to eight weeks to finish its investigation.

Furthermore, the agency stated that it is finishing up its investigation into the restructuring of the Grid Management Committee’s (GMC) membership and determining the best possible legal structure for this reconstitution.

According to the statement, the GMC is principally responsible for overseeing the Grid Code’s implementation as well as examining and suggesting guidelines, policies, and specifications for the establishment, management, upkeep, and expansion of the nation’s electrical grid. —GMA Integrated News, VBL