Steep penalties to be enforced against erring Gencos this August

Published July 31, 2021, 9:00 AM

by Myrna M. Velasco

In this year’s “ghost month”, the erring power generation companies (GenCos) that caused the May 31-June 1 rotational blackouts will be fervidly haunted as steep penalties on their violations of ‘forced outages that had gone beyond the allowable indices’ will finally be meted.

In a hearing of the House Committee on Energy, Chairperson Agnes T. Devanadera of the Energy Regulatory Commission (ERC), divulged that the drafts of the decisions against these GenCos “are already being written,” with her emphasizing that “I’m confident to say that, we took some buffer time, but we will comply with the August deadline.”

The magnitude of penalties awaiting the GenCos that breached the allowable “forced outages” in their electric generating facilities had been pegged at P100,000 to P500,000 per day of unwarranted “unplanned shutdown” in their facilities.

Devanadera noted that based on penalty impositions enforced by the ERC in the past, the maximum fine foisted against such violations had been at P50 million.

“The penalties are for all violations; and the range is from P100,000 to P500,000 per day in excess of the maximum allowable unplanned outage. This is a very specific provision covering the outages,” Devanadera explained.

The power industry regulator previously stated that it has been investigating at least 17 GenCos relating to the ‘forced outages’ that happened in their generating facilities – and these in particular contravened the prescribed reliability indices as set forth by the ERC across technologies.

Nevertheless, House Deputy Speaker Rufus Rodriguez asserted that the current magnitude of penalties might still be a “penny” or very low; and that may not bring forth a ‘tough lesson’ yet –if only to inflict discipline or rebuke upon these habitually delinquent generation companies.

“Let the axe fall on those who have violated the reliability index. Because once you put high penalties, this will be a lesson to them. Otherwise if not, again, they will just be on their own whim – they’d just be able to say: we’re just shutting down for maintenance; we’re stopping operations and so on and so forth,” the lawmaker stressed.

The proposal of Rodriguez is to hike the penalties from the current P100,000- P500,000 to heftier P1.0 million to P5.0 million per day; and for the ERC to clearly tag these Genco-violators as “guilty” in committing such offenses.

On that recommendation, Devanadera acknowledged that the schedule of penalties against these deviant GenCos can still be amended, but the application will already be ‘prospective’, instead of enforcing it retroactively.

“We would be able to increase…the ERC can always amend the rules. However, because these are penal sanctions, it is the position of the ERC that it should be given prospective effect,” the chief industry regulator averred.

She further qualified “for those who are being investigated for the outages, we have to confine with the existing penalties as promulgated by the ERC. Right now, these are the rules, so we are bound to implement what the rules provide.”

 
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