NGCP fined P5.1 million over failure to maintain adequate reserve power

THE Energy Regulatory Commission (ERC) said it levied a P5.1-million fine on the National Grid Corp. of the Philippines (NGCP), citing its failure to procure adequate levels of reserve power to ensure grid security and stability. 

In a statement, the regulator said that the NGCP did not comply with an order by the Department of Energy (DoE) to maintain adequate levels of reserves, which are committed via so-called ancillary services contracts.

The DoE had directed the NGCP to submit for approval the terms of reference and bid invitations to ancillary services providers, in compliance with Section 7.4 and 7.5 of the ancillary service competitive selection process.

In a 20-page ruling dated Oct. 27, the ERC had warned of additional penalties if the NGCP fails to comply, including possible cancellation of the NGCP’s certification of public convenience and necessity (CPCN).  

The NGCP is authorized to act as the transmission service provider by virtue of its CPCN.

The commission also warned that NGCP that it will also recommend the revocation of NGCP’s franchise to Congress if it fails to comply with the ERC’s decision.

The ERC said it is authorized by Section 46 of the Electric Power Industry Reform Act of 2001 to charge a maximum penalty of P50 million.

In September, the ERC had directed the NGCP to explain its failure to maintain adequate reserves.  

An NGCP spokesperson said in a Viber message that the ERC’s actions constitute “fault-finding where there was no fault” that could ultimately have a negative impact on consumers. 

The NGCP also rejected claims that it intentionally disregarded DoE orders. — Ashley Erika O. Jose