ERC proposes conversion of fines into customer refunds

The Energy Regulatory Commission (ERC) is proposing to utilize penalties to be paid by violating power industry players as refunds to consumers affected by power outages.

This was the ERC’s proposed amendment to Republic Act 9136 or the Electric Power Industry Reform Act (EPIRA) of 2001, amid its ongoing probe into the four-day widespread blackout that crippled Western Visayas early this month.

In a news release on Friday, the ERC said its chairperson and CEO Monalisa Dimalanta raised the idea during the congressional inquiry into the region-wide power outage at the House of Representatives on Thursday.

The EPIRA gives the ERC the power to impose penalties ranging from P50,000 to P50 million for violations by power industry players.

The penalties collected by the power industry regulator, however, are being remitted to the National Treasury as part of the state’s coffers.

“In fact, one of the recommendations that we made for the EPIRA amendment is to [give] ERC the authority to order the application of penalties for return, either in the form of refunds or discounts, to the consumers that suffer the inconvenience or the violation that resulted in the interruption of service,” said Dimalanta.

“Right now, we don’t have the authority. But if there is an amendment in the law, then we can have that authority to make the application,” added the ERC chief.

In the first week of 2024, Panay Island was crippled by a massive power outage after multiple trippings of power plants.

Both President Ferdinand Marcos Jr. and Energy Secretary Raphael Lotilla blamed the National Grid Corporation of the Philippines, pointing out that the grid operator could have prevented a system collapse had it acted during a two-hour window to implement manual load dropping or rotational brownouts to maintain the integrity of the island’s power grid.

The NGCP, in its defense, stood firm that the system, before the multiple tripping of power plant units, was normal and that its actions were within protocols.

After two hours, however, six other large units consecutively collapsed, which caused the entire system to shut down.

The ERC said, following the Panay power shutdown, it instituted a proactive approach by mandating hourly updates from the grid operator instead of the previous four-hour intervals.

The power industry regulator also launched its own investigation into the incident.

The ERC earlier said it would take about six to eight weeks for the agency to complete its probe.

In addition, the agency said it is completing the study on the reconstitution of the composition of the Grid Management Committee (GMC) while assessing the most efficient legal framework for this reconstitution.

The GMC is primarily in charge of monitoring the implementation of the Grid Code as well as reviewing and recommending standards, procedures, and requirements for the connection, operation, maintenance, and development of the country’s power grid, it said. —VBL, GMA Integrated News