The Department of Energy (DOE) is issuing show-cause orders to 164 on-grid generation companies and 11 off-grid generation companies as it tightens accountability rules for power generators amidst continuing supply pressures in the Visayas grid.

The DOE said the orders are being issued under Department Circular 2026-02-0006, or its policy on accountability of entities engaged in power generation. 

Generation companies were required to submit annual self-assessment forms covering their compliance with operational commitments and technical specifications, but 164 on-grid firms and 11 off-grid firms still failed to submit the forms despite an extended April 24 deadline.

The department clarified that the 164 on-grid cases refer to 164 generation companies- not power plants, while the 11 off-grid cases cover 37 generating facilities. It said the compliance push is significant because forced outages, prolonged capacity deratings, and failure to deliver committed capacities have contributed to power supply disruptions in several areas.

For the Visayas grid, the DOE said the region still has sufficient supply, but continues to import power from Mindanao and Luzon to meet demand. The department cited more than 2,225 megawatts of local Visayas supply against a peak demand of 2,582 MW.

The DOE said it is reviewing grid operating and maintenance programs to adjust preventive maintenance schedules of generation facilities and help avoid potential yellow and red alerts. It is also preparing around 270 MW of additional capacity for the Visayas, including energy storage systems and other easily deployable technologies.

Possible sanctions under the DOE circular include cease-and-desist orders, blacklisting from competitive selection processes or DOE auction programs, and possible cancellation of permits to operate. However, the DOE said the issuance of show-cause orders does not automatically mean that a generation company is guilty of a violation.

“The show-cause order is for them to explain to us why in their reports, in our reports, in our records, they’ve been violating some rules,” Energy Secretary Sharon S. Garin said.

Garin said any possible cancellation of a permit to operate would not be done hastily because the government must first ensure continued electricity supply for consumers. “At the forefront, consumers need to be protected first. Make sure that the consumers have electricity day in and day out,” she said.

Separately, Energy Regulatory Commission (ERC) Chairperson Atty. Francis Saturnino Juan said show-cause orders related to outage allowances are likely to be issued after the end of the year, since outage allowances are assessed yearly. “The outage allowance is yearly. Most likely, they will be issuing show-cause orders at the end of the year for them to explain,” Juan said.

Juan said the ERC may impose fines on generators that exceed their outage allowances, with penalties potentially reaching millions of pesos because these are computed per incident. “The outage allowance is big because it’s per incident,” Juan said.

He also said the ERC may look into revoking a generator’s certificate of compliance, depending on the case.

The DOE and ERC actions reflect growing pressure on generation companies to meet supply commitments and reliability standards as the Visayas grid continues to face thin reserves.

How can stricter generator accountability help improve reliability in the Visayas grid?

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