NGCP penalized for project delays

By Lenie Lectura – September 2, 2024
from Business Mirror

The Energy Regulatory Commission (ERC) imposed a P3.5-million penalty against the National Grid Corporation of the Philippines (NGCP) for “unjustified delays” in implementing 10 transmission projects.

In its 81-page decision dated June 25, 2024 and promulgated last August 31, NGCP was found liable for violating the directives of the capital expenditure (capex) projects.

According to the agency, there were unjustified delays in the implementation of 10 capex projects, such as the Baloi-Kauswagan-Aurora 230kV Transmission Line Project (Phase 2)-(Kauswagan‐Lala 230kV T/L Project), Pagbilao EHV Substation Project, Antipolo EHV Substation Project, Tuy (Calaca)‐Dasmariñas 500kV T/L Project, Cebu-Lapu-Lapu Transmission Project, Cebu-Negros-Panay (CNP) 230kV Backbone Project Stage 3, and Tacurong-Kalamansig 69kV Line.

“It must be emphasized that 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,” the ERC decision read.

The regulator said delays in the implementation of any capex project have serious implications on the reliability of the grid and on the ability of the transmission system to absorb new power capacities, ultimately affecting public interest.

“This is especially true for NGCP’s capex projects since (NGCP) serves as the sole concessionaire for the operation of the transmission system in the country. Any inexcusable delay on these projects will have a far-reaching impact on our nation’s electric power quality, reliability, security and affordability.

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 added.  A separate decision covering the remaining 27 capex projects will be issued separately, added the commission.

For NGCP’s part, the grid’s operator spokesperson Atty. Cynthia Alabanza said the company will seek legal remedies available to it under the law. “We are studying the issuance and our legal options under applicable laws, rules and regulations.”

The ERC, however, said any motion for reconsideration of the decision will not prevent the said decision from becoming executory, unless otherwise ordered by the commission.

NGCP appealed for the prompt resolution of its overdue recoveries that are all tucked in its maximum annual revenue for the 4th and 5th Regulatory Period (RP) petitions that are still pending before the ERC.

MAR refers to the maximum amount that NGCP is allowed to earn annually to recover its operational expenses like operating expenditures and capex, as approved by the ERC in accordance with the rules.

“Our appeal is that aside from the interest of customers, we also hope that they understand the needs of the investors for a fair regulation and recovery for our projects,” Alabanza said.