National Grid Corp to appeal P5.1-M ERC fine

National Grid Corp. of the Philippines (NGCP), the sole operator of the country’s power grid, intends to appeal the penalty levied by the Energy Regulatory Commission (ERC) for alleged violations of the rules on securing reserve power or ancillary services.

“The company was informed that NGCP intends to file a motion for reconsideration within the period allowed by the rules and regulations,” said Synergy Grid and Development Philippines Inc. (SGP) in a disclosure.

NGCP, the sole operating asset of SGP, is allowed to file its motion within 15 days from receipt of the ERC order.

In its recent 20-page decision, the ERC slapped a P5.1-million fine on NGCP for violating the Department of Energy (DOE) circular on contracting ancillary services.

It came with the threat to push for the revocation of NGCP’s franchise if it fails to comply with the rules prescribed by the DOE on securing ancillary services necessary to ensure the uninterrupted delivery of electricity from power plants to electricity end-users.

It likewise directed the company to submit within 30 days from receipt of its order the terms of reference and invitation to bid to the DOE and “comply with the rest of its obligations under the said policy.”

The regulator had said it would be compelled to impose additional penalties, including the cancellation of its Certificate of Public Convenience and Necessity and a recommendation to Congress to revoke NGCP’s franchise if the grid operator fails to abide by the directive within the given period.

As per the Electric Power Industry Reform Act, the regulatory agency may also impose a maximum penalty of P50 million for each violation of the circular.

Before publishing bidding documents such as the invitation to bid and terms of reference, the NGCP is mandated to secure the DOE’s green light.

NGCP argues, however, that it sees no need to obtain the approval as this constituted “an act of overreach on the part of the DOE.” INQ