Senator Sherwin Gatchalian on Thursday urged the Energy Regulatory Commission (ERC) to penalize the National Grid Corporation of the Philippines (NGCP) for delayed transmission projects that adversely impact the country’s electricity supply.
“I strongly suggest to the commission to enforce fines and penalties so we can impose discipline on NGCP,” he said.
“We are not seeing discipline because a lot of projects are delayed,” added Gatchalian, referring to the delayed projects of NGCP that include backbone projects.
At a recent public hearing conducted by the Senate Committee on Energy chaired by Gatchalian, ERC Chairperson Monalisa Dimalanta disclosed that the completion of about 66 transmission projects is currently delayed, excluding six projects of national significance.
“The bottom line is that the projects are delayed and what are the penalties involved because we can’t just let this go,” she said. Macon Ramos-Araneta
The reason why there is impunity, the senator said, is that there are no penalties imposed.
He stressed that the delayed projects are affecting the entire electric power industry and pose risks for the future of the country.
The lawmaker also urged ERC to review the rate-setting methodology of NGCP’s transmission projects.
“Why are we allowing them to collect from consumers upon the commencement of the project without a defined timeline as to when they can continue to collect for a project?” he asked
This leads to “perverse incentives” because if the project “is delayed for 40 years, they can also collect for 40 years, as their rate reset is also delayed.”
Gatchalian stressed the ERC should aim to complete its rate reset of transmission rates as soon as possible, as this could potentially benefit consumers through improved services and transparent rates.
“From where we stand, our consumers are greatly disadvantaged because we are not seeing the projects, we are not enjoying the benefits and yet they are mandated to pay for those uncompleted projects,” he said.
During the same hearing, it was revealed that the NGCP consistently paid dividends to its shareholders from 2008 to 2022 ranging from P6.8 billion to P24 billion a year.