Erring power firms must shoulder consumers’ economic losses during outages, says lawmaker

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MANILA, Philippines — The economic losses of consumers during power interruptions should be passed on to generation companies (GenCos) not compliant with rules set by the country’s energy regulator, Senator Sherwin Gatchalian said Friday.

“They should be penalized and the cost of economic losses on behalf of the consumers should be passed on to them,” Gatchalian, head of the Senate energy panel, said in an interview on ABS-CBN News Channel.

“For example, if they went on unplanned outages or forced outages, the consumers are the one bearing the economic losses. That should be transferred to the gencos, meaning they should be penalized,” he added.

During Thursday’ Senate hearing on the power supply shortage in the country led by Gatchalian, Energy Secretary Alfonso Cusi said the forced and unplanned outages of several major power plants servicing Luzon were the “ultimate cause” of the rotational brownout in the area.

Energy Secretary Alfonso Cusi

The Energy Regulatory Commission (ERC) has sent Notices of Non-Compliance to generation companies asking them to explain the incurred cumulative unplanned outages beyond the maximum allowable unplanned outage days for the year.

The ERC has also identified generation companies that do not comply with the reporting requirements under ERC Resolution No. 4, Series of 2015.

Out of the 2,083 incidents of unplanned outages from January to April in 2021, only 1,288 of these were reported.

“In other words, rules are present, and GenCos should follow that because if they don’t follow it then we get affected as consumers,” Gatchalian pointed out.

“The rules should be followed, if they violate those rules then they should be penalized,” he added.

Last week, Luzon experienced rotational power interruptions due to thinning energy supply.

The rotational brownouts from May 31 to June 1 affected over 700,000 households and resulted in more than P116 million in economic losses, Gatchalian said during Thursday’s Senate hearing.

Sen. Win Gatchalian, chairman of the Committee on Energy, presides over a hybrid inquiry into the rotational power outages last May 31 and June 1 following the privilege speech of Sen. Emmanuel “Manny” Pacquiao, and on Senate Resolution No. 740 which seeks to find long-term solutions to power supply shortages.   (Senate PRIB)

Gatchalian meanwhile stressed the need for the Department of Energy (DOE) and the ERC to foster better communication in order to improve the enforcement of policies.

“The power sector is deregulated, meaning the private sector puts in the cash and operates the entire power sector,” the senator said.

“The ERC is delayed in terms of enforcement and they have to improve their communication with DOE, these two should talk and act fast,” he added.

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