Power industry’s integrity must not be compromised

My women readers, most of them housewives, as I am, have expressed concern over a controversy that haunts the electric power industry. This is especially true with regard to the National Grid Corporation of the Philippines (NGCP), the company tasked to ensure transmission of electricity from the independent power producers to millions of households in the entire Philippine archipelago.

It turned out that the concern about the presence of Chinese experts in NGCP has been answered, pointing out that the experts are there to assure that technical expertise is readily available for a sensitive job like assuring unimpeded electricity transmission to our household, factories and establishments on a 24-hour basis. 

I had a lengthy conversation with a person knowledgeable about the electric power industry. The more troublesome development, he told me, is the quarrel over turf by three agencies of government as to which one can regulate the NGCP. The three agencies are the Department of Energy (DOE), the National Transmission Corporation (TransCo), and the Energy Regulatory Commission (ERC). 

Let’s backtrack a bit to know that our electric power industry structure is made up of three principal actors – or sectors – to assure us that our electric stove, microwave oven, refrigerator, washing machine, and electric lights among others, operate without fail.

The three main functions to assure power supply are: Power Generation, Power Transmission, and Power Distribution. 

Generating electric power is handled by several independent power producers (IPPs) which use coal, fuel oil, hydroelectric current, natural gas, wind, geothermal and biomass gas. These are big private firms which have put up power generation plants, and entered into power purchase agreement with government through the state power firm National Power Corporation (Napocor). Under this scheme, government has assured IPPs of its guarantee that it will buy every kilowatt hour of electricity from the power producers. There is enough electricity being produced, so gone are the days of power shortage.  This is going very well.  

Transmission of power is the responsibility of NGCP, a privatized company made up Filipino and Chinese investors, which maintains and operates transmission towers all over the country. These towers are connected by cables through which a steady stream of electricity flows from the IPPs to the power distributors. The network of transmission towers, thousands of kilometers of electric cables, and substations, plus a no-fail system to assure 24-hour electric transmission, is called the National Grid.  Except when the towers are felled by angry insurgents or strong  typhoons, this system is going very well.

The retail side of power supply is distribution of power. Electricity from the Grid, courtesy of NGCP, flows to the thousands of substations maintained by Distribution Utilities (DUs) and electric cooperatives around the country. And these distributors make sure power goes to homes, businesses, factories, schools, churches and all other end-consumers of electricity. Except for minor squabbles among small players, which are not big enough to disrupt the flow of valuable electric power, this too is going very well.

And, yes, dear readers, we have a regulator for this industry – the Energy Regulatory Commission (ERC). ERC is mandated by law to supervise the three sectors in the electric power industry. Not TransCo, and not even the DOE.  Every industry, vested with public interest, has a regulator. So, the huge telecommunications firms are regulated by the National Telecommunications Commission (NTC). Just as water sourcing and distribution are regulated by the Metropolitan Water Works System (MWSS); expressway firms are regulated by the Toll Regulatory Board (TRB); and banks are regulated by the Bangko Sentral ng Pilipinas (BSP), and so on and so forth. 

That’s why, something is potentially wrong when TransCo and DOE want to be the power industry regulator – when this mandate  is given to ERC. Under the concession agreement between NGCP and government, ERC is the sole government agency which can conduct an audit of NGCP. This is based on the Electric Power Industry Reform Act (EPIRA) of 2001, and this assures the integrity, efficiency, and graft-free operation of the critical transmission of power. 

Actually, TransCo is allowed  by law to periodically inspect substations and transmission assets, but cannot conduct a comprehensive system operations audit, because this is the job of ERC.  Such an audit, NGCP asserts, would allow TransCo to make its own determination on NGCP’s system operations to ensure reliability, security, and integrity of the grid. The concession agreement does not allow such audit, precisely because it is ERC which is mandated to do the job.

Now, the cat is out of the bag. People have been asking why TransCo wants to dip its fingers into regulating NGCP, when it is exclusively the domain of ERC. The answer came recently when TransCo announced it wanted to expand into the growing telecommunications industry! It doesn’t make sense! But if you look closer, TransCo wants to use NGCP’s transmission towers to connect – not electric transmission cables – but fibre optic cables! For what? For a teleccommunications company! 

This was opposed immmediately by some legislators, as they know full well that TransCo is trying to unduly expand its mandate to something alien to electric power – telecommunications! The well-meaning legislators said, TransCo must remain with the electric power industry sector.  They are asking curious and disturbing questions about the “hidden agenda” of people behind TransCo.

At any rate, dear readers, this column is of the view that the integrity of the electric power industry must be preserved and protected. Such integrity will make sure the electricity produced will be transmitted through the grid by authorized agencies and companies.

As for us, women and household managers, we want our electricity flowing from producer to transmission firm to power distributors in a seamless way, morning, noon and night. We want such power to continue to illumine our evenings, and to operate the conveniences of home!

The power industry’s integrity must not be compromised!

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