NGCP fined P3.5M for ‘unjustified’ project delays

The Energy Regulatory Commission (ERC) has slapped the country’s grid operator with a P3.5-million penalty over the delayed implementation of some of its projects, saying this could be detrimental to the public.

In a statement on Saturday, the ERC said the National Grid Corporation of the Philippines (NGCP) failed to follow its directives in rolling out in a timely manner capital expenditure (capex) projects, involving 10 developments.

The projects that had “unjustified delays” include: Baloi-Kauswagan-Aurora 230-kilovolt (kV) Transmission Line Project (Phase 2) – (Kauswagan-Lala 230-kV T/L Project), Pagbilao EHV Substation Project, Antipolo EHV Substation Project, Tuy (Calaca)-Dasmariñas 500-kV T/L Project, Cebu-Lapu-Lapu Transmission Project, Cebu-Negros-Panay (CNP) 230-kV Backbone Project Stage 3 and Tacurong-Kalamansig 69-kV Line.

Implications

The ERC argued that delays could 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.”

“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. 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,” the 81-page decision read.

“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.

The regulator said it was also investigating 27 other NGCP projects.

“We are studying the issuance and our legal options under applicable laws, rules and regulations,” NGCP spokesperson Cynthia Alabanza said, when asked for a comment. —LISBET K. ESMAEL INQ