Contracts & Commercial

Clear Rules on revoking Franchises of under-performing DUs sought

Date: 22 February 2019; Type: Legal News; Source: Philippine News Agency

MANILA, Feb 22 (PNA) - A senator on Friday stressed the need for a clear policy on the recommendation for revocation of franchises to hold underperforming distribution utilities (DUs) accountable for failing to fulfill their duties and responsibilities under the Electric Power Industry Reform Act (EPIRA) law.

In a statement, Senator Sherwin Gatchalian said there has been no policy for the Department of Energy (DOE) or the Energy Regulatory Commission (ERC)to identify underperforming DUs, whose franchise will be recommended for revocation.

Gatchalian cited the shortcomings of DUs, such as the various complaints of rolling brownouts across the country, their non-compliance with the system loss caps and system average interruption frequency index, and failure to electrify areas within their respective franchises.

He noted that Palawan experienced an average of 126 power interruptions in 2017, beyond the standard of 25 interruptions per consumer annually; meanwhile, the Autonomous Region in Muslim Mindanao (ARMM) is still the top "unelectrified" region in the country with 72.6 percent of its households without power as of Dec. 31, 2017.

"The situation above highlights the necessity for a clear policy and procedure on how DUs can be held accountable for their duties and responsibilities under the EPIRA, through the recommendation of DOE or ERC for the revocation of their franchise, all towards the promotion and protection of consumers' interest," Gatchalian said.

Apart from urging Congress to determine whether or not non-performing DUs should continue operating their franchises, Gatchalian also called for a Senate probe on their operations.

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