NGCP pays P5.1-M penalty to ERC

National Grid Corporation of the Philippines (NGCP), which operates the country’s transmission backbone, last week settled the P5.1-million penalty levied on it by the energy regulator for its failure to secure reserve power or ancillary services.

In a statement issued on Friday, the Energy Regulatory Commission (ERC) said NGCP settled its penalty on Nov. 21.

The ERC previously slapped NGCP with a fine as the latter violated the Department of Energy’s circular on contracting ancillary services, coupled with a threat of the possible revocation of the company’s congressional franchise.

Under the rules, the grid operator is mandated to conduct open and competitive bidding to secure ancillary services necessary to ensure the uninterrupted delivery of electricity from power plants to electricity end-users.

“This aims to improve transparency, competitiveness, and wide dissemination of bid opportunities among qualified facilities. For energy security, it is crucial for NGCP to meet and maintain the required reserve levels,” the ERC said.

Meanwhile, the ERC announced that NGCP formally filed its application for resetting the transmission rates, among the charges collected from consumers.

The regulator will commence the hearings on rate resetting and the process of verifying the completeness and accuracy of the information submitted by NGCP in January next year.

“We are encouraged by NGCP’s cooperation in filing its application for a rate reset. We view this as an alignment of interests among the regulator and energy stakeholders to pursue moving our energy sector towards a regime of higher level of compliance and accountability,” said ERC Chair Monalisa Dimalanta.

NGCP lodged its application after the ERC denied its omnibus motion to delay the rate reset until such a time that another round of public consultations has been conducted.

It had sought clarification on certain provisions of the Amended Rules for Setting Transmission Wheeling Rates (Amended RTWR) promulgated by the ERC in a move to restore balance in transmission regulation.

It includes the review of the fourth regulatory period from 2016 to 2022 and the fifth regulatory period for years 2023 to 2027.

The ERC, however, denied NGCP’s petition on the grounds that several public consultations on the revised rate resetting rules were held as early as 2014.

The regulator said NGCP actively participated in the process and it already addressed NGCP’s requests for clarification.

The last time the ERC undertook this procedure was for the regulatory period covering 2011 to 2015.