Camarines Sur Rep. LRay Villafuerte has backed the Department of Energy’s (DOE) performance review of the National Grid Corp. of the Philippines (NGCP), saying that once completed, it could help enlighten Congress on what actions to take to address the subpar. performance of the country’s sole power grid operator.
“Congress needs to decide soon enough on whether to alter or amend NGCP’s franchise agreement to compel it to upgrade its system and spend a sizable chunk of its earnings on interconnecting our major islands, or to revoke its franchise altogether and award it to a much better concessionaire so the government can deliver cheaper and more stable and accessible electricity to consumers — and meet President Marcos’ goal of achieving 100 percent household electrification by 2028,” he cited.
He said he is hoping that “the DOE could complete at the soonest its NGCP performance audit, which, hopefully, can help us lawmakers reach a consensus on what actions we have to take to reverse the below par performance of our lone power grid operator in terms of preventing major power disruptions, and compelling it to complete its transmission projects as scheduled and spending bigger on interconnecting our major islands.”
“Otherwise, if we do not find such a makeover possible in the NGCP franchise or if there is resistance from the operator to these pro-consumer reforms, then the Congress may have to consider revoking its 50-year franchise and awarding it to a new concessionaire that can deliver much better services to our people,” he said.
The executive department and Congress must give paramount attention to accelerating the interconnection from north to south via the national power grid so as not to put off track the President’s lofty target of attaining 100 percent household electrification, he said.
“The NGCP’s apparent failure to keep up with its transmission development and interconnectivity program for the country is standing in the way of the President’s full-electrification target, given that Mr. Marcos himself revealed in his second State of the Nation Address the undue delay in this concessionaire’s 68 transmission projects, including those in the vital Mindanao-Visayas and Cebu-Negros-Panay grids,” Villafuerte said.
Government data showed that the 68 delayed transmission projects covered 36 projects in Luzon, another 21 in the Visayas and 11 more in Mindanao with a combined P231 billion worth of supposed investments by NGCP between 2009 and 2019, he said.
At least 31 of these delayed projects worth P22.705 billion were listed under those approved in the third regulatory period (TRP) or rate reset period, while the 37 others totaling P208.34 billion in supposed investments were listed outside of the TRP, he added.
One of the 37 delayed transmission projects is the Pagbilao EHV substation project, which is the southern portion of the 500 kV transmission backbone from Tayabas, Quezon to Naga.
“DOE’s ongoing performance review of NGCP may help guide us lawmakers on what reforms to pursue as regards this transmission consortium’s concession agreement, in light of crippling power outages believed caused by its failure to fully expand as committed its nationwide transmission system on which gencos (generation companies) and DUs (distribution utilities) depend on to deliver electricity to our people,” he said.
“We need answers to these questions: Will reforming or amending the over two-decade-old EPIRA be enough to, for example, prevent regulatory capture that has apparently allowed the NGCP to funnel most of its corporate profits into dividends for its owners instead of into capex (capital expenditure) to expand and upgrade its physical or fixed assets and, worse, collect higher electricity charges even for its still-unfinished transmission projects?” he asked.
“Or will Congress have to amend the exclusive concession agreement that the NGCP acquired from the government in 2009 to require it to pay a higher franchise fee or corporate income tax? Or to compel it to meet its warranted deliverables, if not revoke this deal altogether for its apparent contract violations?” he stated
