DOE to recommend review of NGCP franchise after widespread power outage in Panay
The Department of Energy (DOE) will recommend the review of National Grid Corporation of the Philippines (NGCP) franchise as it supports the call for the conduct of legislative inquiry on the widespread power outage in Panay.
This was expressed by Energy Secretary Raphael Lotilla in a press conference Friday on the prolonged power interruption that affected Panay Island.
"We fully support and welcome the call made by legislative leaders and Panay local officials for a legislative investigation into this latest incident with a view to revisit and review the franchise of NGCP to ensure the timely expansion of the transmission system in line with the development needs of our people and for its effective and efficient operation," he said.
"We will recommend to Congress that the review include: (a) separation and transfer of the systems operation function from NGCP which shall focus on the transmission network provider function: (b) authorizing the ERC to impose administrative penalties on the transmission concessionaire of P2M per day of violation or non-compliance with regulatory rules, or 1% of the cost of the delayed project based on the ERC-approved project cost, whichever is higher; and (c) review the special tax privilege of NGCP to pay only a 3% franchise tax in lieu of all other national and local taxes," he added.
Lotilla said the energy department "will give full support to the ERC in completing the reset of NGCP’s rates, ensuring NGCP’s compliance with its legal obligations and resisting any attempt to delay or obstruct the implementation of regulatory measures."
"We will exert all efforts to exact full accountability for any failures in the delivery of the services expected from NGCP as the transmission concessionaire and the country’s biggest monopoly," he said.
"With ERC, we will get to the root cause of the tripping of the 6 power plants, and conduct a technical analysis of the Panay grid in order that necessary grid enhancements are carried out. The DOE will review the scheduled plant maintenance shutdown of all plants to widen the margin for regulation and contingency," he added.
Lotilla explained that according to the Independent Electricity Market Operator of the Philippines (IEMOP) the island-wide blackout could have been prevented if the NGCP proactively called on the distribution utilities and electric cooperatives in Panay to reduce their load in order to prevent a sub-system-wide collapse during a two-hour window following the tripping of the first power plant.
"From the time that a generator had an unscheduled breakdown past noon of January 2, NGCP did not do anything as the systems operator responsible for maintaining the stability and integrity of the transmission grid," he said.
"The loss of supply covering more than 15 percent of the power generated from Panay Island should have alerted NGCP to call for manual load reduction. The previous incident in April 2023 should have served as a lesson to take extraordinary precautions due to the fragility of the grid," he added.
However, the NGCP insists "that there was no transmission disturbance before the tripping of the PEDC Unit 1 (83MW) at 12:06 pm."
"After this event, NGCP was able to recover the transmission system and normalize voltage. This normal voltage situation persisted until several power plants inexplicably tripped at 2:19 pm. Data from our system shows no abnormality in voltage and system stability. Despite this, critics persist in blaming NGCP for what are clearly problems arising from the unplanned shutdowns of power generators," it stated.
"It is alarming to hear policymakers immediately make conclusions based on assumptions contrary to fact. We are firm in our position that the system prior to the 2:19 pm multiple tripping was normal, and our actions were undertaken within protocols. Any contrary statement is speculative," it added.
The NCGP also "firmly refutes allegations suggesting that NGCP failed in its obligation to stabilize the transmission system."
"We also take exception to the allegations that we were less than transparent in providing information to the public. We provide regular updates to all stakeholders, including the media and government units (LGUs), through print, radio, broadcast, social media, and text blasts," said NGCP.
"Rather than using NGCP as a scapegoat, we urge policymakers to be objective in their search for facts and not coddle certain sectors. This is not a time to push personal or political agendas, but a time for honest-to-goodness solution finding. We again reiterate our push for a comprehensive industry-wide approach to resolve the persistent power supply issues on Panay Island and elsewhere in the country," it stressed.
Amid the issues, the NGCP assures its stakeholders that they will continue to work closely with concerned government agencies and LGUs to expedite the resolution of the issues while Lotilla noted that the DOE will also "continue to work with NGCP to ensure the completion of: (a) the Panay-Negros-Cebu backbone project whose completion has been moved six times to March 2024 from the original target date of December 2020; (b) the Mindanao-Visayas Interconnection Project whose completion has been moved to 25 January 2024 eight times from the original December 2020 date; and (c) all other projects including the Hermosa-San Jose transmission line in Luzon originally for completion in May 2018."
