More DUs urged to justify pass-through fuel charges

MANILA, Philippines — Several distribution utilities may face potential administrative penalties due to their non-compliance to the show cause orders issued by the Energy Regulatory Commission (ERC) as part of its ongoing fuel cost audit.

The ERC had directed 116 distribution utilities to submit information on the pass-through fuel cost charged to their customers.

However, the commission said only 16 distribution utilities have initially submitted.

As a result, 100 distribution utilities were issued show cause orders by the ERC, of which only 65 have complied.

The show cause orders direct the distribution utilities to explain why they should not be penalized for failure to provide information on the pass-through fuel cost charged to their customers.

“There were only 16 utilities in the first round of request that complied with our order for information, with another round of show cause orders issued to the 100 that initially did not comply. 65 already complied,” ERC chairperson Monalisa Dimalanta said.

The ERC earlier said the submission of reports related to fuel charges is a condition for the grant of authority to charge generation rates under their power supply agreements.

It said the non-compliance of distribution utilities with reportorial requirements undermines their primary obligation to procure energy supply for its captive consumers in the least cost manner.

The ERC is targeting to complete by the first quarter of next year the fuel cost audit it is undertaking.

The audit aims to verify the accuracy of fuel charges imposed on electricity consumers under the power supply agreements.

“We’re completing the fuel cost audit. Audit the fuel cost that has been passed on to consumers by distribution utilities and electric cooperatives. So we are undertaking the review of all those submissions,” Dimalanta said.

The ERC initiated a fuel audit as part of broader efforts to enhance transparency and accountability in the energy industry.

The ERC said that by scrutinizing fuel charges and ensuring their accuracy, it aims to safeguard the rights and interests of electricity consumers, preventing the undue burden of unjustified costs.