Title
Amendment of ERC Sanction Guidelines
Law
Erc No. 03, S. 2009
Decision Date
Feb 23, 2009
ERC Resolution No. 03, S. 2009 amends administrative sanction guidelines for non-compliance and fraudulent reporting in the electricity sector, imposing escalating fines and penalties based on the number of violations and the severity of the offenses.
A

Sanctions for Non-Submission of Documents (Section 4)

  • Applies to any person who, without justifiable reason, fails to submit documents as required by the ERC’s List of Reportorial Requirements or other mandated documents.
  • Penalties increase progressively based on the number of violations and duration of delay:
    • 1st violation: Php 50,000; additional penalty for delay ranges from 10% (1–3 months), 50% (3–6 months), to 50% monthly for over 6 months.
    • 2nd and 3rd violations: Php 100,000 with similar increasing delay penalties.
    • 4th and subsequent violations: Php 200,000 with monthly delay penalties.
  • Submission of reports containing fraudulent information is treated as non-compliance with heavier sanctions:
    • 1st violation: Php 200,000 plus additional penalty based on financial benefits.
    • 2nd violation: Php 300,000 plus higher penalty if intended to conceal illegal acts.
    • 3rd and further violations: Php 500,000 plus cancellation of CPCN, license, and franchise.
  • Personnel responsible for submissions face penalties escalating from Php 100,000 to Php 400,000 based on repeated violations.
  • No compromise agreements allowed for repeated violations.

Sanctions for Non-Compliance with the Act, IRR, Grid and Distribution Codes, and Other ERC Regulations (Section 5)

  • Targets violations of all provisions under the Electric Power Industry Reform Act, including its Implementing Rules and Regulations (IRR), Philippine Grid and Distribution Codes, and other ERC rules, orders, and resolutions.
  • Penalties escalate with repeated offenses:
    • 1st and 2nd violations: Php 100,000 with additional penalties for willful delays in compliance, starting at 10% for delays over one month.
    • 3rd and 4th violations: Php 300,000 with higher additional penalties for over two months’ delay.
    • 5th and subsequent violations: Php 500,000 plus cancellation of CPCN, license, and franchise, with 100% additional penalty for delays over three months.
  • No compromise agreements allowed for repeated violations.

Definitions and Responsible Officers

  • Defines responsible officers as those who directly participate in or authorize the preparation and submission of reports/documents.
  • Establishes personal liability and administrative sanctions on officials committing fraudulent reporting.

Procedural Aspects

  • Penalties increase progressively with repeated non-compliance.
  • Additional penalties apply proportionally to the length of delay after notice of violation.
  • Cancellation of Certificate of Public Convenience and Necessity (CPCN), licenses, and franchises applies to serious and repeated violations.
  • Strict prohibition of compromise agreements for repeated offenses to ensure enforcement and deterrence.

Effectivity and Dissemination

  • The resolution takes effect 15 days after publication in two newspapers of general circulation.
  • Copies of the resolution are to be furnished to the University of the Philippines Law Center-Office of the National Administrative Register and all electricity generation, transmission, distribution, and supply entities.

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