ERC vows sanctions vs NGCP on over 70 delayed projects

At a glance

  • Despite delay in the completion of at least 72 projects, NGCP has already been passing on cost recoveries for these facilities in the electric bills of consumers.

The Energy Regulatory Commission (ERC) will mete out "the full force of the law" against transmission firm National Grid Corporation of the Philippines (NGCP) for the more than 70 delayed projects that caused deterioration in the delivery of services and inflating bills of ratepayers.

The delay in 66 typical transmission projects, plus six more projects of national significance had been disclosed by the regulatory body during a public hearing that was convened this week by the Senate Committee on Energy.

ERC Chairperson Monalisa C. Dimalanta firmly stated “We can assure the Senate and electricity consumers that this Commission is conducting a diligent review of the complaints, delays and possible violations of NGCP.”

The ERC chief further stipulated “we are prepared to enforce the full force of the law as appropriate based on the findings.”

Senate Committee on Energy Vice Chairman Sherwin T. Gatchalian spearheaded intensified calls on the ERC  “to penalize NGCP appropriately for delayed transmission projects that adversely impact the country’s electricity supply.”

As unearthed during the Senate inquiry, despite the delay of massive NGCP projects, the costs of such infrastructure buildup are already being passed-on in the monthly electric bills, hence, that has been aggravating the financial burden of consumers who are already being saddled with inflationary pressures of rising costs of basic commodities.

Gatchalian thus prodded the ERC “to enforce fines and penalties so we can impose discipline on NGCP. We are not seeing discipline because a lot of projects are delayed.”

The lawmaker stressed “the bottom line is that the projects are delayed and what are the penalties involved because we can’t just let this go. The reason why there is impunity is that there are no penalties imposed. The delayed projects are affecting the entire electric power industry and pose risks for the future of the country.”

On this year’s summer months alone, three critical projects are under close monitoring and scrutiny by the Department of Energy (DOE) – because the substantially stretched timeframe of completion of these facilities could aggravate the tight supply condition already distressing Luzon and Visayas grids.

These highly important transmission projects with snagged commercial operations include the 500-kilovolt (kV) Balsik (Hermosa)-San Jose transmission line with original completion date on June 28, 2019; the 230kV Cebu-Negros-Panay backbone-stage 3 project which has targeted completion on March 31 last year;  and the Mindanao-Visayas Interconnection Project (MVIP) that was slated to come on commercial stream since January 8, 2021.

Should these three projects been completed on time, stranded generation capacities could have been seamlessly wheeled into the grid and could have guaranteed additional power supply for the country – including 600-megawatt capacity from the Limay coal-fired power plant in Bataan; the additional generation of solar plants in Negros; as well as the export of capacity from the supply surplus in Mindanao which may then be shared to the Luzon and Visayas grids.

The adjustment process on the tariffs to be passed on by NGCP in the electric bills has been anticipated for completion early part of this year, but the voluminous interventions filed by array of relevant stakeholders have been impeding the early resolution of the rate reset case.

Dimalanta noted “NGCP filed its application only in November 2022; and we received 10 intervenors who all needed to be given their day in court. There were also motions filed by NGCP that needed to be resolved to move forward.”

On the delayed transmission projects, NGCP Assistant Vice President and Head of Corporate Communications Cynthia Alabanza expressed the company’s “apologies for the delayed projects,” with her adding that they have been “doing something about it” – and energization of one of the projects is targeted this week.

“This does not mean that we never encountered problems, it’s just normal that there’s disturbance on a day-to-day … and based on the assessment of our performance on that ability to recover, the performance so far is good, although it’s not perfect,” she claimed.