Gatchalian orders ERC audit of power fuel charges

Senate President Sherwin Gatchalian on Thursday directed the Energy Regulatory Commission (ERC) to submit a timetable and comprehensive audit plan for fuel-related charges passed on by power companies to consumers, as part of efforts to reduce electricity costs.

During a Senate Committee on Energy hearing, Gatchalian said generation charges account for about 60 percent of an electricity bill, with fuel costs for coal, liquefied natural gas and other conventional energy sources making up a significant portion of the amount paid by consumers.

He said the ERC should determine whether fuel costs being passed on by generation companies and distribution utilities accurately reflect actual market and purchase prices to ensure consumers are not overcharged.

The Senate leader also instructed the ERC to submit its audit resolution and identify regulated entities that have failed to comply with the commission’s requirements.

ERC Chairperson and Chief Executive Officer Francis Saturnino Juan said the regulator’s confirmation process allows it to determine whether distribution utilities have over-recovered or under-recovered pass-through charges, adding that the commission can immediately order refunds if excess collections are found.

He explained that while distribution utilities would refund consumers because they collect electricity payments, they may recover the amount from generation companies that violated their fuel-adjustment agreements.

Gatchalian also urged the ERC to review contracts between distribution utilities and power generators, particularly provisions governing fuel-price adjustments.

He cited more than 400 show-cause orders previously issued by the regulator and sought updates on 104 distribution utilities and 37 generation companies facing compliance issues.

The Senate President warned that utilities repeatedly violating regulatory requirements could face congressional scrutiny of their franchises, including possible recommendations for franchise audits or cancellation.

For his part, Juan assured the Senate panel that the ERC would submit the requested audit timetable, action plan, and other relevant documents.