DOE’s ‘Causers Pay Policy Program’ to start within the year

By Lenie Lectura – July 19, 2017

from Business Mirror

The Department of Energy (DOE) will no longer allow “negligent and incompetent” power-industry players to pass on to consumers the additional costs incurred in sourcing higher priced electricity when a power outage occurs.

Energy Undersecretary Felix William Fuentebella said this will be the objective of the DOE’s soon-to-be-released policy, dubbed as the “Causers Pay Policy Program”.

Under this new policy, Fuentebella said the DOE will pass on the burden of shouldering the incremental cost to the  generation companies (gencos), distribution utilities (DUs) and the National Grid Corp. of the Philippines (NGCP), “if the cause of the outage is intentional on their part, if they were negligent or incompetent”.

“This is a proposed policy that we will seriously look into together with the ERC  [Regulatory Commission] and have it tested. Basically, it will be determined if the cause was intentional or not, if there were lapses on their part that led to the outage, which could have been avoided in the first place,” Fuentebella said, on the sidelines of the two-day forum on Philippines Power and Electricity Week.

The proposed policy would be formalized through a memorandum circular, which is targeted for issuance within the year.

While the penalty is yet to be firmed up, the DOE official said the responsible party would be made to pay for the incremental cost of electricity.

For instance, when a power plant conks out and the DOE was able to determine that there was negligence on the part of the plant operator, the operator must shoulder, among others, the cost related to sourcing a more expensive fuel source, instead of passing on this cost to the consumers.

“We want them to be held liable. They are accountable for incidents which could have been averted,” the DOE official added.

However, if the sudden power outage incident was caused by unforeseeable circumstances, such as natural calamities, the concerned parties would not be panelized. “Force majeure events are not included,” Fuentebella said.