NGCP chided at Senate hearing over charging consumers for delayed projects

(INQUIRER file photo)

MANILA, Philippines — Several senators on Wednesday rebuked the National Grid Corporation of the Philippines (NGCP) for charging its consumers for its delayed projects. 

However, the Energy Regulatory Commission (ERC) said the power transmission operator has the authority to do so. 

During the Wednesday hearing of the Senate energy committee, ERC chairperson Monalisa Dimalanta confirmed that under the Interim Maximum Annual Revenue (iMAR), NGCP is “unfortunately” allowed to collect for projects that are still not completed. 

ERC records show 72 delayed NGCP projects, including six energy projects of national significance (EPNS). 

Senator Sherwin Gatchlian decried this, noting that funds are already being collected from consumers who have yet to benefit from the uncompleted projects. 

Dimalanta clarified that she has yet to validate if the NGCP is already collecting from these projects since, in principle, they should only collect what they have spent. 

“So if it’s not yet completed, our assumption is that they have not spent their entire allocation for it. And they’re supposed to collect based only on what they have spent,” she added.  

Still, Gatchalian argued that the NGCP is already collecting from consumers for its delayed projects. 

“Consumers are disadvantaged at the onset because we are not seeing the projects. We are not enjoying the benefits. But we are being mandated to pay for those uncompleted projects,” he said. 

Senator Raffy Tulfo, who chairs the panel, also called out the ERC for giving the NGCP authority to do so. 

“They’re already earning from a project that the people they’re collecting money from have yet to benefit from. Isn’t that so shameless? Why did you allow it? They should charge only for the projects they’ve completed. That’s just right and proper because they spent on those. But if they have not even shelled out money for it, and yet they’re collecting, that’s shamelessness,” he fumed. 

Senator Risa Hontiveros further pointed out that aside from charging consumers for its delayed projects, the NGCP distributes hefty dividends to its shareholders. 

NGCP revealed earlier in the hearing that a huge sum of its net income in 2014, 2015, 2017, and 2019 went to dividends. 

“That’s another shameless act. That’s foolish. The project isn’t even done yet. Much worse than Judas, you’re already splitting the funds,” he said. 

Tulfo asked the NGCP to stop collecting from its consumers for its delayed projects. 

“Have some shame. Your consumers are not yet benefiting from the projects. So stop charging first. Don’t be so shameless. Okay?” 

However, NGCP spokesperson Cynthia Alabanza argued that she could not say for certain if they are already charging consumers for their delayed projects since the iMAR generally intends “to support” their operational and capital expenditures as determined by the ERC. 

She also noted that three of their delayed backbone projects mentioned earlier are not under the ambit of the iMAR. 

Alabanza said consumer collections also go to completed projects, which may not be ERC-approved but will need operational funding. 

She recognized that it might appear like the NGCP is “full of excuses” regarding its delayed projects. 

“But the reality is, we do suffer both external and internal delays. That’s why if it’s delayed, it’s not because we don’t want to finish it. We just encounter a lot of hurdles,” she said.

Alabanza later apologized to the committee for the NGCP’s seemingly sluggish completion of its projects. 

‘DOE, ERC’s hands are tied’

Energy Undersecretary Sharon Garin said pushbacks in the implementation schedule of NGCP projects are “without the approval” of the ERC or the Department of Energy. 

“So sometimes, when there are delays, we are just informed. We are not consulted,” she said. 

Due to the concession agreement between the NGCP and the National Transmission Corporation and the grid operator’s congressional franchise, Garin said the DOE “cannot do anything.” 

And the ERC, she noted, can only impose a P50 million maximum fine per violation. 

Tulfo said they would consider these when the committee proposes amendments to the Electric Power Industry Reform Act. 

The concession agreement and legislative franchise of the NGCP will likewise be looked into. 

Gatchalian, meanwhile, “strongly suggested” that the ERC firmly imposes penalties and fines for the NGCP. 

“Without these, we will not have discipline,” he said. 

He also called on the ERC to review its regulatory methods, particularly on why it allowed the NGCP to charge consumers before the commencement of a project. 

“We cannot control it if a four-year project is delayed and made into a 40-year project…There is a perverse intention,” he added.

gsg/abc