Question & AnswerQ&A (ERC GUIDELINES RE RepublicT ACT NO. 9136, MAY 17, 2002)
The ERC is responsible for enforcing the Implementing Rules and Regulations (IRR) of the Act, amending or revoking authority to operate for non-compliance, establishing and enforcing methodologies for rate-setting, reviewing changes in service terms of TRANSCO or distribution utilities, imposing fines and penalties for violations, monitoring and penalizing market power abuses, and promoting free market competition in the electric power industry.
The guidelines apply to all persons violating or failing to comply with Republic Act No. 9136 and its IRR, the Philippine Grid and Distribution Codes, rules, regulations, orders, resolutions, and other laws assigned to the ERC.
A Distribution Utility refers to any electric cooperative, private corporation, government-owned or local government unit which has an exclusive franchise to operate a Distribution System in accordance with its franchise and the Electric Power Industry Reform Act of 2001.
A penalty of Fifty Thousand Pesos (₱50,000) plus One Hundred Pesos (₱100) for every day of violation is imposed on any person who fails, without justifiable reason, to submit required documents such as Annual Reports and Financial Statements.
A fine of One Hundred Thousand Pesos (₱100,000) plus One Hundred Pesos (₱100) for every day of violation is imposed on violators, which includes operating without permits, failure to provide open access, non-compliance with technical standards, failure to implement mandated rate reductions, among others.
The ERC must issue a written notice informing the offender of the violation, give the offender an opportunity to present an explanation, and issue a warning about the consequences before penalizing them. The sanctions do not preclude possible criminal actions.
A penalty ranging from Fifty Thousand Pesos (₱50,000) up to Fifty Million Pesos (₱50,000,000) may be imposed at the ERC's discretion for acts including cross-ownership, cross-subsidization, price manipulation, or other unfair trade practices.
The ERC may impose a penalty from Fifty Thousand Pesos (₱50,000) up to Fifty Million Pesos (₱50,000,000), require divestment or disgorgement of excess profits, and pursue criminal actions where warranted.
Repeated violations under non-compliance provisions, anti-competitive acts, and fraud or misrepresentation related to stranded costs can lead the ERC to recommend to Congress the revocation of the offender's franchise or privilege.
The ERC may impose a fine not exceeding Fifty Thousand Pesos (₱50,000) for misconduct that seriously interrupts proceedings, refusal to comply with subpoenas, refusal to be sworn as a witness, or refusal to answer required questions.
Yes, parties may offer a compromise settlement before a decision is rendered. The ERC generally requires settlement offers to be at least 50% of the computed penalty, though exceptions can be made based on good faith, gravity of violation, first offenses, and other meritorious reasons.
IRR refers to the rules and regulations of Republic Act No. 9136 promulgated by the Department of Energy and approved by the Joint Congressional Power Commission, which set the operational framework for the electric power industry reform.