The Energy Regulatory Commission (ERC) is preparing to penalize power generation companies in Visayas whose prolonged plant shutdowns have triggered persistent yellow grid alerts and threatened the regional power supply.

ERC Chairperson Francis Saturnino Juan said in an interview last week that the regulators plan to issue formal show-cause orders before the end of the year to hold the companies accountable for the continued outages. The commission has already issued initial notices to the generation firms, directing them to explain why their facilities have remained offline past acceptable thresholds.

However, the regulator faces a delicate balancing act. While the ERC has the authority to sanction companies that breach regulatory limits, its enforcement options are constrained by the region’s razor-thin supply margins.

“We can only issue fines,” Juan said. “We cannot close them down because we’re already lacking power supply. We cannot revoke their licenses, because we’re already looking for power.”

Under ERC Resolution No. 10, Series of 2020, power plants are subject to strict caps on the number of allowable outage days per year. The commission has already identified several companies that have exceeded these limits.

To address systemic reliability issues, the regulator is also moving to tighten existing frameworks. Juan noted that the commission has agreed on amendments to the current resolution regarding reliability indices, which are expected to be released soon.

The regulatory crackdown comes amid prolonged supply crunch in Visayas. As of June 26, a total of 1,011.5 megawatts of capacity remained unavailable to the region’s grid, according to data from the National Grid Corporation of the Philippines.

The shortfall is driven by a cluster of prolonged shutdowns, including 13 plants that went on forced outage this month alone. Another eight facilities have been offline since May, one since March, and three have failed to return to service since last year.

Among the most critical plants contributing to the regional deficit are major baseload coal facilities. These include two units of Therma Visayas Inc. and Unit 3 of the Panay Energy Development Corp., both of which remain offline, exacerbating the vulnerability of the regional grid.