ERC Orders 40 GenCos to Explain Fuel Cost Gaps

The Energy Regulatory Commission (ERC) has issued show-cause orders to 40 generation companies (GenCos) for failing to submit complete fuel purchase documents, a move that could lead to penalties and consumer refunds if unjustified electricity charges are found.

The ERC said the missing documentation covers the period from January to October 2022 and is essential in verifying whether the generation charges passed on to consumers were fair and lawful under the Electric Power Industry Reform Act (EPIRA).

Among the GenCos served with orders were major players such as San Miguel Energy Corp., GNPower Dinginin Ltd. Co., Masinloc Power Partners Co. Ltd., KEPCO SPC Power Corporation, Palm Concepcion Power Corp., SPC Island Power Corp., Therma Luzon Inc., and Toledo Power Corporation, alongside smaller utilities operating in island and off-grid areas.

“The ERC continues to conduct rigorous fuel audits to make sure that only fair and reasonable costs are being charged by our regulated entities,” said ERC Chairperson and CEO Monalisa C. Dimalanta.

“We owe it to the Filipino consumers to protect them from unnecessary charges and ensure that they’re not paying more than they should for electricity,” Dimalanta added.

The orders were released between December 2022 and March 2024, but full compliance has not been met, prompting the ERC to escalate the matter.

Under Sections 43(o) and 43(r) of EPIRA, GenCos are required to submit supporting documents for all fuel purchases, which serve as the basis for the generation charges billed to distribution utilities and ultimately, to consumers.

The GenCos now have 15 days to respond, providing the required documents and verified explanations for their non-compliance.

Failure to justify fuel costs could lead to administrative penalties, fines, and even customer refunds if overbilling is discovered, according to the ERC.

“We likewise remind GenCos and DUs to fully cooperate and comply with these requirements, so we can uphold transparency and deliver power at the least cost possible,” Dimalanta said.

The issue comes amid heightened scrutiny of electricity costs, as consumers continue to face rising utility bills driven by global fuel price volatility and inflationary pressures.

The ERC’s action is seen as part of a broader effort to enforce accountability and transparency in the energy sector, especially as the Philippines diversifies its power mix and moves toward more sustainable and cost-efficient sources.

Consumer advocates welcomed the move, saying transparency in pricing is long overdue, particularly in areas heavily reliant on diesel or bunker fuel.

The GenCos named in the order include both fossil fuel-based and hybrid generators, some of which operate under missionary electrification programs funded through the Universal Charge for Missionary Electrification (UCME).

Fuel costs typically make up a significant portion of generation charges in oil-dependent facilities, making their documentation critical to verifying that no excess or unjustifiable costs are passed onto end-users.

Should the ERC’s audit uncover discrepancies, it could result in financial liabilities for the non-compliant GenCos, along with recalibration of generation rates moving forward.