‘Helpless’ DOE wants review of NGCP franchise after Luzon outages

Energy Secretary Alfonso Cusi

MANILA, Philippines — Energy Secretary Alfonso Cusi called on the Senate to revisit the franchise granted to the National Grid Corporation of the Philippines (NGCP) as he flagged “compliance issues”—not a power crisis—in the recent Luzon brownouts.

“Even sa audit…ang DOE (Department of Energy) po is helpless so kailangan nga po bisitahin natin ang prangkisa na ibinigay ng Congress sa [the DOE is helpless so we need to revisit the franchise Congress gave to] NGCP,” Cusi told the Senate energy committee during Thursday’s hearing on power supply shortages.

“The problem (outages) is not a power crisis but this is a compliance issue,” he also said.

Cusi had repeatedly criticized NGCP for being “consistently non-compliant” with the requirement to secure “firm” contracts for ancillary services that would provide on-call, backup energy supply whenever needed.

The Energy Regulatory Commission (ERC) has already ordered the NGCP to explain the delay in 33 approved power transmission projects. The NGCP said it would cooperate with the ERC and provide all the needed information.

Last week, Luzon experienced rotational power interruptions due to thinning energy supply. Cusi told the Senate panel that it was due to the shutdown of four big power plants.

Nevertheless, he said there is a “sufficient” power supply in the country. According to Cusi, there are 10,600 megawatts of net available energy supply in Luzon, including reserves.

Cusi stressed the need for firm contracted reserves because it intends to “provide safety capacity to the grip without reduced inventory” and oblige generation companies to “ensure availability of required power.”

“We are demanding NGCP to comply with their concession agreement by contracting the required reserves, but yung aming panawagan, di po narinig, di po pinakinggan [but our call was not heard, it was not listened to],” the Energy chief said.

The DOE, during a House hearing last Friday, said the “red alert” status of the Luzon grid may persist until this week but rotational brownouts may no longer be experienced by mid-June.

‘Constantly bullied’

The NGCP, during Thursday’s inquiry, decried being “constantly bullied” and being “used as a scapegoat” amid the recent power interruptions in Luzon.

“We were blamed for not contracting enough ancillary service as if it is the solution to the problem,” NGCP president Anthony Almeda said.

The NGCP has been criticized by Energy Secretary Alfonso Cusi for its supposed non-compliance with the requirement to secure “firm” contracts for ancillary services, which commit the supplier to deliver, as opposed to “nonfirm” contracts wherein power companies have a leeway to not deliver.

According to Almeda, the NGCP “has 100 percent contracted a healthy mix of firm and non-firm ancillary service contracts.”

“We have been called out for not contracting 100 percent firm but should we allow this directive, there will be an astronomical spike in electricity prices for consumers,” he added.

“The red alerts experienced last May 31 and June 1 were due to generation deficiencies since several power plants went on forced or unplanned outages…Ancillary service contracting will not solve this supply problem. New plants will,” Almeda further said.

/MUF