The Energy Regulatory Commission (ERC) has slapped system operator National Grid Corporation of the Philippines (NGCP) with P3.5 million worth of penalties for at least 10 transmission projects that it failed to deliver on targeted commercial operations date.

A statement from the regulatory body emphasized that NGCP was found “liable for violating the directives of the Commission in relation to (its) capital expenditure (capex) projects.”

The ERC similarly indicated that separate ruling will be rendered soon on another 27 delayed transmission projects that had also been investigated by the regulatory body.

For the initial batch of penalty imposition, the projects classified to have ‘unjustified delays’ have been the: 230-kilovolt (kV) Baloi-Kauswagan- Aurora transmission line project (Phase 2); 230kV Kauswagan‐Lala transmission line; Pagbilao extra high voltage (EHV) substation facility; and Antipolo EHV substation project.

The rest have been the 500kV Tuy (Calaca)‐ Dasmariñas transmission line; Cebu-Lapu-Lapu transmission project; 230kV Cebu-Negros-Panay (CNP) backbone project stage 3; and the 69kV Tacurong-Kalamansig Line.

“For its failure to meet the timelines set for the implementation of the 10 capex projects subject of the decision, the ERC imposed a fine of P3.5-million against the NGCP,” the industry regulator stressed.

NGCP confirmed that it already received on Friday (August 30) a copy of the June 25, 2024 ERC decision on the enforced penalties.

"We are studying the issuance and our legal options under applicable laws, rules and regulations," the company conveyed.

Relative to the ruling, the ERC had apprised NGCP that “any motion for reconsideration of the decision will not prevent the said decision from becoming executory, unless otherwise ordered by the Commission.”

The ERC qualified “this is not an issue of whether or not these capex projects have a rate impact to the consumers because any delay and unrealized capex project is prejudicial to the public,” adding that “this is especially true for NGCP’s capex projects since (it) serves as the sole concessionaire for the operation of the transmission system in the country.”

The regulatory body further noted “any inexcusable delay on these projects will have a far- reaching impact on our nation's electric power quality, reliability, security and affordability.”

The ERC decision expounded that “the delayed implementation of its capex projects will impact the ability of the grid to absorb new power capacities that will address the growing power demand of communities, businesses and other sectors of society. All these have implications on the rates of electricity and the economy at large.”

It was just last month when President Marcos has been praising NGCP in his State of the Nation Address (SONA) for major transmission projects that it completed – including the P51 billion Mindanao-Visayas Interconnection Project (MVIP); the P20.94 billion Hermosa-San Jose transmission facility; P67.98 billion Cebu-Negros-Panay (CNP) interconnection; as well as the P19.61 billion Cebu-Bohol transmission link-up project which is due for completion this year – and these served as the only recent key accomplishments of the energy sector.

And while it pursued the commercial completion of these facilities, NGCP was conversely complaining of delayed regulatory approvals on its capex applications for transmission projects, hence, it is being compelled to advance investments even without certainty of eventual full cost recoveries.