Power disruptions in Luzon prompt call to audit NGCP

MANILA, Philippines — After blackouts in several parts of Luzon last week due to damaged transmission lines, a lawmaker has called for a performance assessment of the National Grid Corporation of the Philippines, which has not been reviewed for its performance since it was privatized in 2009.

Rep. Joey Salceda (Albay), House ways and means committee chairperson, has called for the Energy Regulatory Commission (ERC) to audit the NGCP for its performance by August 2023, when billions worth of new power grid lines are set to be completed.

“The NGCP is supposed to complete the Bataan-Hermosa line, the Cebu-Negros-Panay connection, and the Mindanao-Visayas interconnection by August 2023. I strongly urge an audit by the ERC by then,” Salceda said.

“If not, we in Congress will do it,” he added.

The NGCP is a private corporation which has had sole control over the country’s nationwide transmission grids since 2009. It carries a 25-year concession and a 50-year congressional franchise to manage and expand the country’s power transmission grid.

READ: NGCP vows to complete major transmission projects this year

Salceda said that the NGCP’s supposed “complacency” in being a “monopoly” could be to blame for its failure to act on line tripping that led to forced outages in two power plants on May 8.

The NGCP put the Luzon grid under red alert on May 8 following the tripping of the Bolo-Masinloc 230-kilovolt line 2, which led to the tripping of the Masinloc Units 1 and 2 with a capacity of 618 MW.

While initially, a representative of the NGCP said that heavy rains and a lightning strike on the transmission line caused it to trip, it has since said in a statement that there was a “redundancy,” wherein the load carried by Line 2 when it tripped was automatically transferred to Line 1.

The NGCP said that there was an “unexpected and undesired response from a generating plant.” This “tipped the balance of supply and demand” due to issues of compatibility with NGCP’s customers, causing a red alert to be raised.

In response to the unplanned outages in several power plants, a spokesperson of the NGCP has said that it is open to inspections and audits to be conducted on the company, according to a The Philippine Star report on Saturday.

Monopoly issues

Salceda said: "This was a mistake that could have been avoided if the NGCP were not so complacent about its monopoly.”

Besides the pressing need to improve the country’s transmission grids before more transmission projects are switched on, an audit carried out directly by the Energy Regulatory Commission is also mandated by a “very explicit provision in the NGCP franchise that they can use to act on audit findings,” Salceda added.

Salceda was referring to Section 3 of the NGCP franchise, which states that “it shall be the duty of the Grantee, its successors or assigns, whenever required to do so by the [ERC] or its legal successor, to modify, improve and change such system or facilities” according to what improvements in the electric power services are required.

Energy Secretary Raphael Lotilla has said that the ERC is set to conduct two performance audits on the NGCP, with an initial financial audit already completed.

Lotilla also explained that recent prolonged power outages in Panay and Negros, along with the blackouts experienced in Luzon on May 8, have been due to inadequacies in the transmission system.

“This is the first audit that has been conducted, primarily on the financial side with observations as well on the technical side,” Lotilla said.

“We will follow that through with a regulatory performance audit which is conducted by the ERC and by a contract performance review which is to be conducted by PSALM and Transco as the counterparties to the NGCP in the concession agreement,” he said. — with reports from The STAR / Richmond Mercurio