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Manila Bulletin devider Business devider Gov't wants daily P2-M fine for Panay Island power outage

Gov't wants daily P2-M fine for Panay Island power outage

Published Jan 5, 2024 06:08 am

At A Glance

  • The Department of Energy (DOE) and the Energy Regulatory Commission (ERC) propose a P2 million per day violation fine for the National Grid Corp. of the Philippines (NGCP).<br> Energy Secretary Raphael Lotilla supports local officials and legislators in holding NGCP accountable for the recent widespread blackout in the Panay Island.<br>Lotilla requests the separation and transfer of the system operation function from NGCP.<br>The energy chief suggests that the transmission concessionaire should only pay a three percent franchise tax instead of all other national and local taxes.<br>Despite the current issue, the DOE will continue to collaborate with NGCP to ensure the timely completion of all delayed infrastructure projects.

The Department of Energy (DOE) and the Energy Regulatory Commission (ERC) are working to make sure the National Grid Corp. of the Philippines (NGCP) takes responsibility for the long power outage in the Panay Islands.

In a briefing on Friday, Jan. 5, Energy Secretary Raphael Lotilla said that the ERC intends to impose a daily fine of P2 million for the island-wide blackout that began on Jan. 2.

“[We will be] authorizing the ERC to impose administrative penalties on the transmission concessionaire of P2 million per day of violation or non-compliance with regulatory rules, or 1 percent of the cost of the delayed project based on the ERC-approved project cost, whichever is higher,” he said as a recommendation to the Congress.

Along with his suggestion, Lotilla said that Congress could also include the possibility of separating and transferring the systems operation function from NGCP.

Additionally, DOE expects a review of the transmission concessionaire’s special tax privilege, stating that they should “pay only a three percent franchise tax in lieu of all other national and local taxes.”

The DOE will still work alongside NGCP to ensure the completion of their infrastructures that were delayed multiple times.

This includes the Panay-Negros-Cebu backbone project that has been moved six times from December 2020 to March of this year.

The Mindanao-Visayas Interconnection Project, which was also moved eight times from December 2020 and is expected to be completed by January 25, 2024.

Lastly, the Hermosa-San Jose transmission line was supposed to be done last May of 2018.

The DOE hopes to revisit the NGCP franchise to ensure the timely expansion and transmission system in line with the development needs to avoid further power mishaps.

“We will give full support to the ERC in completing the reset of NGCP’s rates to ensure its compliance with legal obligations and resisting any attempt to delay or obstruct the implementation of regulatory measures,” Lotilla added.

Furthermore, the energy chief stated that the recent power interruption affected Panay and parts of Negros Occidental for the second time in less than a year.

“The Independent Electricity Market Operator of the Philippines [IEMOP] has pointed out that there was a two-hour window when the NGCP could have proactively called on the distribution utilities [DUs] and electric cooperatives [ECs] in Panay to reduce their load to prevent a sub-system-wide collapse,” Lotilla stressed.

“The loss of supply covering more than 15 percent of the power generated from Panay Island should have alerted them to call for a manual load reduction… The previous incident in April 2023 should have served as a lesson to take extraordinary precautions due to the fragility of the grid,” he added.

Related Tags

Department of Energy Energy Regulatory Commission Blackout Panay Island National Grid Corp. of the Philippines (NGCP)
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