Tell it to SunStar: Is power transmission MIF’s mandate too?

Tell it to SunStar
Tell it to SunStarSunStar file photo

By Sen. Imee R. Marcos

I remain unconvinced that investing part of the Maharlika Fund in the National Grid Corp. of the Philippines (NGCP) is the right way to solve power transmission problems nationwide.

  • Why should the MIC (Maharlika Investment Corp.) spend money to improve the performance of the NGCP when it is regulated by the Energy Regulatory Commission (ERC)? Why should we use public funds when regulatory measures are available? I would like to cite provisions in Republic Act 9136, or the Electric Power Industry Reform Act of 2001.

The NGCP itself said funding was not a problem, but I would like to question how the NGCP has been spending its net income.

The problem of NGCP is not lack of cash but lack of performance. The NGCP’s comprehensive income totaled P307 billion in the past 14 years, of which P239 billion, or more than 77 percent, has been distributed to shareholders, even as the NGCP claimed P309 billion in transmission upgrades.

The “alarming lack of improvement” in the NGCP’s power transmission capacity has caused automatic load-dropping incidents and grid-level outages, inadequate procurement of ancillary services to prevent outages, and delays in the completion of grid projects lasting as long as seven years, which is why I called for a review of the NGCP’s franchise in Senate Resolution 832.

We could have avoided the recent power outage in Panay if the Cebu-Negros-Panay Backbone Project and the Visayas-Mindanao Interconnection Project were finished on schedule. Now, billions have been spent with no ROI (return on investment) in sight.

Instead of investing in the NGCP, the government should exclude unfinished projects in the computation of the private corporation’s rates.

This will incentivize the NGCP to finish projects before recouping costs.

There should be penalties for delays.

I would like to cite the recent decision of the ERC to exclude ongoing projects in resetting rates of the NGCP.

Right-of-way problems and the long process of obtaining permits from local governments also contributed to the delay in the NGCP’s interconnection projects.

Let me point out former President Rodrigo Duterte’s Executive Order 30, which created the Energy Investment Coordinating Council (EICC) and recognized energy projects as Projects of National Significance.

Given the problem of permitting faced by NGCP projects, the inclusion of the respective leagues of LGUs (local government units) in the EICC can help in simplifying the process.

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