DOE, ERC policies must be checked, too amid high costs, brownouts

MANILA, Philippines — Instead of putting the blame on the grid operator alone, two lawmakers have suggested checking and reviewing the policies of the Department of Energy (DOE) and the Energy Regulatory Commission (ERC) in terms of rising power costs and supply interruptions.

During the joint hearing of the House of Representatives’ committee on energy and committee on legislative franchises regarding the May 13 power interruptions, Apec party-list Rep. Sergio Dagooc urged lawmakers to also focus on the “technical, regulatory, and financial issues” affecting the power industry instead of immediately putting the blame on other players.

Palawan Rep. Jose Alvarez, chairperson of the committee on energy, said that the National Grid Corporation of the Philippines must not be blamed immediately.

“So dapat hindi sisihin ang NGCP (So NGCP must not be blamed),” Alvarez said during the hearing on Tuesday.

“If you have the plants but transmission is not ready, there’s a problem. If there’s transmission but plants are lacking, it’s also a problem,” Dagooc said.

According to Dagooc, there may be policies that contribute to both supply constraints and higher electricity costs, as there are instances wherein the proposal for strategic power plant placements was not followed.

Revisit existing circulars and market rules

The strategic set-up was meant to avoid excessive transmission investments and unnecessary costs. As such, Dagooc said both DOE and ERC should revisit existing circulars and market rules governing reserve procurement and ancillary services.

“Power plants should not sprout like mushrooms. If the locations pinpointed are wrong, there would be a need for new and additional transmission facilities, costs which are passed on to consumers,” Dagooc said.

“Every time there’s a line congestion, there’s an additional P5 to P7 charge. Why isn’t this reviewed yet?” he asked. “Respectfully requesting the ERC and DOE to review these circulars and policies. Some of these issuances are contributing to higher electricity costs, yet we continue blaming the wrong parties.”

Alvarez and Dagooc’s stand coincides with the defense of NGCP, which told the House committees that they are only able to transmit power to the country’s grid lines when it is available or if there is something to send.

In a statement which he delivered before the committee, NGCP president and chief executive officer Anthony Almeda explained that the Luzon grid remained intact even with the tripping of two 500 kilovolt (kV) lines—the Dasmarinas-Ilijan and Ilijan-Tayabas lines—by morning of May 13.

After the tripping incident, Almeda said the situation was still at normal condition, adding that alerts were only raised when other generating plants—Binga, Casecnan, and Limay—also went on unplanned shutdown by 1 p.m., and after the forecast demand increased by 312 megawatts (MW).

Root cause

According to Almeda, they are investigating the root cause of the transmission disturbance, as it can be a result of sabotage.

The NGCP head also stressed that it would be wrong to consider the incidents as caused by “transmission outage” as it is not only misleading, but would hinder the government and industry players from addressing the problem and formulating solutions.

Almeda said that most of the red alerts raised by NGCP were due to generation supply challenges and not problems with the grid. He said these problems, along with the Visayas grid’s dependency on power from Luzon and Mindanao, should be addressed to ensure a robust power supply chain.

“These factors, in our view, highlight one thing: we need more baseload supply. Otherwise, red alerts will continue to be a regular occurrence. The incoming solar capacity is a welcome addition to our pool of energy sources. But, as the sun begins to set, and solar power harvest starts waning, the system again loses much-needed capacity,” he said.

READ: NGCP clarifies: We can only transmit power if it’s available

“The red alerts that followed the transmission tripping incident began mid-afternoon and persisted until midnight, when there was no sunlight to harvest,” he added.

Last May 18, House Speaker Faustino “Bojie” Dy III and Senior Deputy Speaker Ferdinand Hernandez filed a resolution seeking an investigation into the NGCP over the repeated transmission line failures that caused power supply disruptions.

READ: House reso seeks probe into NGCP, power outages

At one point in the hearing, NGCP was quizzed about its alleged failure to issue timely reports to the Department of Energy (DOE). However, NGCP found an ally in Murang Kuryente party-list Rep. Arthur Yap, who said that the focus of the hearing should be the power supply shortage—as it is the root of the rotational brownouts, and not supposedly late reporting.

Yap intervened when lawmakers were asking whether NGCP was able to fulfill its obligation to deliver on-time incident reports to the DOE.

According to Yap, the brownouts last May 13 would not have existed in the first place if the country’s grid had enough supply, regardless of power plants tripping.

READ: Solon: Supply shortage, not late reporting, caused power outage

Before Yap intervened, Dagooc said that while he is not accusing NGCP of any wrongdoing, the concerns on the late reporting may have been brought by the fact that the company was the one responsible for constructing the line and operating it.

Dagooc then asked for a copy of the report regarding the tripping of two 500-kilovolt transmission lines that forced the Luzon grid to shed load, noting that he can actually get photos of any possible damage from a substation in his hometown.

But Yap reiterated that it is not the reporting that caused the rotational brownouts—noting that even the claim of late reporting is questionable since he still receives grid reports, a practice that started when he was Bohol provincial governor. /cb