Probing the pernicious blackout from 2 to 5 January on the islands of Panay, Guimaras, and parts of Negros Occidental should start with former Energy Regulatory Commission chairperson and CEO Agnes Devanadera.

Iloilo City, a development center in the Visayas region, reported losses of P1.5 billion due to the power outage.

Had the previous ERC administration under Devanadera ensured that the concessionaire National Grid Corp. of the Philippines, or NGCP, kept its projects on schedule and complied with its commitments under its contract with the government, the power interruptions could have been prevented.

The Western Visayas region has enough power and the potential to supply other provinces had the Panay-Negros-Cebu interconnection been completed as promised.

The island has 1 gigawatt of new power generation capacity, but the pace of development in the region requires an enormous electricity supply.

The Mindanao-Visayas interconnection will be relied on to provide 500 megawatts more.

The delayed Mindanao-Visayas Interconnection Project should have been completed even before the pandemic, but NGCP had made excuses such as damage to the submarine cable and, lately, a court case for the delay.

Power plant operators face risking their capital for power projects without an assured cash flow due to the delayed connections of the electricity grid.

Devanadera should have cracked the whip on NGCP as the system operator, as the power supply would have been sufficient if not for the incomplete program to integrate the power grids into one backbone.

The Department of Energy, or DoE, even had to prod Devanadera to act on several other commitments of NGCP.

Under the Electric Power Industry Reform Act, the ERC has the sole authority to regulate the power industry, while the DoE is restricted to policy making.

Devanadera should have acted on the anomalous and exorbitant weighted average cost of capital or WACC, which resulted in NGCP exceeding the mandated income for a utility firm.

NGCP collects a WACC of around 15 percent when the country’s neighbors charge from 7 percent to 10 percent.

Another neglected policy that would have assured an adequate electricity supply is the requirement for reserve capacity.

Devanadera allowed NGCP to drag its feet on securing firm ancillary service, or AS, contracts that could support the supply when major power plants suddenly bog down.

The oft-repeated excuse of NGCP is that acquiring new contracts for AS would mean an increase in consumers’ monthly bills despite its concession agreement mandating that it ensure backup electricity.

DoE data show the country has enough power plants to generate the electricity it needs if only NGCP completes its delayed projects.

The most crucial of Devanadera’s inactions during her term was not conducting a power audit.

Her excuse that the ERC did not have the personnel and resources for an extensive audit failed to hold up since agencies such as the Department of Energy, the National Transmission Corp., and even the Commission on Audit had offered to help in an extensive check of NGCP operations.

It would have been as easy as Devanadera seeking the help of the agencies for expertise since the ERC is mandated to tap other government agencies, such as the Commission on Audit, to augment its capability.

CoA was previously engaged to look into private entities with functions imbued with public interest, such as in the case of the Manila Electric Co., when ERC sought to verify whether refunds to Meralco customers had been disbursed or credited to their accounts.

The DoE and grid owner Transco have experts in the engineering field who can be tapped for the audit, yet Devanadera failed to lift a finger.

Instead, ERC went along with the NGCP scheme for an online audit.

While Devanadera and big businesses did the waltz of regulatory capture, consumer welfare was thrown out the window.