DoE mulls NGCP audit within year

Lotilla reiterated that a comprehensive review is needed to get to the bottom of all the country’s transmission problems, which usually causes power interruptions

The Department of Energy may order within the year the holding of the long-delayed comprehensive system and performance audit of the National Grid Corporation of the Philippines, the country’s lone transmission system operator.

“We will be issuing the necessary orders to commence this, of course within the year. We’re just waiting for all the audit reports to be in and accepted by the Energy Regulatory Commission,” Lotilla said in a recent interview with reporters.

Lotilla reiterated that a comprehensive review is needed to get to the bottom of all the country’s transmission problems, which usually causes power interruptions.

“Our job is to make sure that we have the proper, called for comprehensive study and audit that will be the basis for finding out what is the solution for finishing three major interconnection projects,” the Energy chief said.

“We need to finish these projects first and foremost because these will free up stranded power. There’s 600 megawatts or even more that gets stranded in Bataan, for instance,” he explained.

ERC holds review

Currently, the ERC is conducting a full regulatory performance audit of the NGCP, while Power Sector Assets and Liabilities Management and National Transmission Corporation will also launch a contract performance review of the operator.

The DoE had floated anew the call to subject NGCP to a comprehensive audit after the Luzon grid was placed in yellow and red alerts early this month due to the tripping of the transmission line that caused some power plants to fail.

For its part, the NGCP already relayed that it will continue to open its gates to any government-funded audit of its systems and operations.

However, NGCP spokesperson Atty. Cynthia Alabanza said Thursday that the China-backed company will only open its doors on the condition that any audit proceedings will follow its regulatory framework.

“On the audit, for as long as it is within the regulatory framework that NGCP works under its franchise and concession agreement, we are open to that,” Alabanza said.

The NGCP holds a 25-year franchise to solely operate the power transmission assets of the government and secure power reserves for contingency.

Among others, NGCP is undertaking the P52-billion Mindanao-Visayas Interconnection Project or MVIP. The DoE previously said the project will launch within the first half of the year but will be pushed back anew to an indefinite date still within the year.

The MVIP will link together all three major Philippine islands to create one grid.

The NGCP was authorized by the ERC to start building the project way back in 2017. It was initially scheduled to be completed in 2020 but it was delayed due to the pandemic.

Energy Undersecretary Rowena Guevara stated if NGCP had completed the Visayas-Mindanao connectivity project, Mindanao might have augmented Luzon’s electricity delivery.

Still, Reyes pointed out that the resulting power outages have threatened the lives of the people, who are in critical need of life support services and medical attention throughout the summer months.

He then emphasized that the reliability of power supply is necessary for the delivery of medical services and other life-affirming medical treatments, and these power interruptions caused by the lack of proper ancillary service agreements “clearly stems from NGCP’s failure to recontract these services early on.”

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