September 2, 2024 | 12:00am
MANILA, Philippines — The Energy Regulatory Commission (ERC) has imposed a P3.5-million penalty against the country’s sole power grid operator for alleged slow completion of 10 transmission projects.
In an 81-page decision dated June 25 but only promulgated over the weekend, the ERC penalized the National Grid Corp. of the Philippines (NGCP) over “unjustified delays” in the implementation of capital expenditure (capex) projects.
These include the Baloi-Kauswagan-Aurora 230-kilovolt line, Pagbilao and Antipolo EHV (extra high voltage) substations, Tuy-Dasmariñas 500-kV line, Cebu-Lapu-Lapu project, Cebu-Negros-Panay 230-kV project Stage 3 and Tacurong-Kalamansig 69-kV line.
“It must be emphasized that this is not an issue of whether or not these capex projects have a rate impact on the consumers because any delay and unrealized capex project is prejudicial to the public,” the decision stated.
Any “inexcusable” project delays, the power regulator said, could seriously compromise the quality, reliability, security and affordability of the country’s electricity, leading to broader economic repercussions.
“The delayed implementation of its capex project 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,” the ERC said.
Furthermore, the commission said that it will issue a separate decision covering the remaining 27 capex projects under investigation.
It likewise reminded the NGCP that any motion for reconsideration would not prevent the decision from becoming executory unless ordered by the ERC.
Sought for comment, NGCP spokesperson Cynthia Alabanza said they are studying the latest decision and exploring legal opinions under applicable laws, rules and regulations.
The grid operator earlier said that ERC’s delayed approval on its rate applications continues to negatively affect its transmission projects.
In 2023, the NGCP sought approval of its maximum annual revenue for the fifth regulatory period (5RP) covering the years 2021 to 2025, the filing of which had run in parallel to the ERC’s review of the grid operator’s 4RP.
The rate reset process sets the rules and parameters for the investment, operations and pricing mechanisms of the NGCP for a five-year period.
The NGCP’s last transmission reset was for the period ending in 2015. This means the 4RP that should have started in 2016 had already concluded.
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