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On power outages: Cusi points to NGCP ‘compliance issues’

The Philippines does not have a power crisis, only “compliance issues” with its power reserves that are supposed to be delivered by the National Grid Corporation of the Philippines (NGCP), Energy Secretary Alfonso Cusi told a Senate committee hearing on Friday.

At the same time, Senator Risa Hontiveros said the government should regain control of the country’s power grid as the Department of Energy proposed recently, especially with the NGCP being 40-percent owned by Chinese state-owned corporation.

“What we have right now is not a power crisis, but compliance issues,” Cusi said as he pushed energy stakeholders to comply with the implementation of power-related policies.

The Energy chief explained that the main cause of the current rotational brownouts in Luzon was the forced or unplanned outages of several major power plants. He reiterated there should be reserves which should be provided by the NGCP.

Unfortunately, he said, the Department of Energy has found NGCP to be continuously remiss in its obligations under its franchise agreement, particularly in procuring ancillary services (AS) or power reservers.

Another cause to the power outages, Cusi said, is the delay in the completion of transmission lines connecting Negros to Panay to Cebu, and Mindanao to Visayas, which could have helped bring more energy to Luzon.

“It has been frustrating. But at least, now we again have an opportunity to talk about this. Hopefully, this time, the Senate would appreciate what the DOE has been talking about all these years,” he said.

To improve the power situation, the Energy chief appealed to the legislators to consider what the DOE has been proposing – to allow the government to engage in power generation. 

The intention is not to compete with private companies, Cusi said, but rather to augment the energy supply requirements when needed.

He also sought the committee’s assistance to amend the NGCP’s franchise to revert to the government the system control of the grid for proper management of ancillary services as well as national cybersecurity, since NGCP is a private corporation with substantial foreign ownership.

Cusi also recommended to take back from the NGCP the responsibility of preparing the Transmission Development Plan.

Hontiveros, meanwhile, believes more government control can help address rotating brownouts and various problems related to the operations of the NGCP.

“It is time to review our policies and empower government to make the necessary reforms since it appears that privatization has not solved our country’s energy woes at all,” she said.

Hontiveros noted that in the same Senate probe of recent rotating brownouts in Metro Manila and other parts of the country, Cusi revealed multiple instances of the NGCP failing to comply with government policies meant to ensure steady power supply in the nation.

Ancillary services or reserves are one of the critical components in having a more secured and reliable power system, Cusi noted.

“In fact, rotational brownouts and blackouts had occurred in the country a long time ago -- 21 rotating brownouts in the country in 2019, 10 rotating brown-outs in 2020, and 3 rotating brownouts in January to March 2021 here in Luzon,” the senator added.

Despite the NGCP’s compliance problems, however, Hontiveros said the penalty provision of the existing governing law – the Electric Power Industry Reform Act EPIRA) or RA 9136 – does not allow the DOE to act apart from recommending to Congress to revoke NGCP’s franchise.

“We should not stand helplessly on the sidelines as NGCP repeatedly fails the Filipino people and does not deliver the services it is mandated to provide,” said Hontiveros.

She said the government should be fully empowered to take over the system control of the power grid if the NGCP “continues to ignore government policies and standards, especially in a time of crisis such as today,” Hontiveros said.

Apart from operational issues, the senator said that restoring control of the power grid to the government will facilitate a better review and upgrade of the cyber-security of the power grid.

“Let us not forget that at present, the NGCP is 40 percent owned by Chinese state-owned corporation. It will be harder for the country to protect our power grid from cyberattacks, similar to those in the United States when our power grid operator is partly owned by foreigners.”

Hontiveros said that she will completely support any proposed legislation that will be introduced in the Senate amending the NGCP franchise, saying that the country’s energy needs must be met as it continues to deal with the COVID-19 pandemic and national elections are less than a year away.

“Now more than ever, Filipinos need steady and affordable power. We deserve better power services, so we should demand better power services for everyone,” Hontiveros said.

Topics: National Grid Corporation of the Philippines , power outage , Alfonso Cusi
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