ERC slaps NGCP with P15.8-M fine

The National Grid Corporation of the Philippines (NGCP) is facing a P15.8-million fine for failing to meet the timelines in delivering 34 of its 37 projects nationwide, the Energy Regulatory Commission (ERC) disclosed Monday.

At a hearing of the House Committee on Legislative Franchises, ERC chairperson Monalisa Dimalanta told lawmakers they are demanding an explanation from the NGCP in connection with their investigation into the 37 delayed projects.

“Out of the 37 delayed projects, we found that there were unjustified delays for 34 projects. Because of the number of projects, this was not taken up in just one commission meeting; we had to [take] up two commission meetings, so there were two decisions,” she narrated. “It was a fine of [a] total P15.8 million for 34 projects with unjustified delays.”

Committee chairperson Gus Tambunting questioned the adequacy of the fines, noting that they seemed disproportionately low compared to the significant economic impact of the delays.

“That’s averaging around P500,000 per project? How were the fines established? Is it a fixed rate?” Tambunting asked Dimalanta.

While acknowledging Tambunting’s concern about the limitations of the penalty system, Dimalanta said the ERC had to adhere to its established schedule of penalties.

“Mr. Chair, we have a schedule of fines and penalties. The first two instances of penalties are only penalized, I think, at P100,000 per violation and then the succeeding ones are at P500,000. So there was a graduation of penalties," Dimalanta explained.

“But since we realized, that the cost of these penalties [was] you know, could not really be compared to the cause of delays, but we are bound by the schedule of penalties,” she added.

The NGCP has reportedly paid the fines, but Dimalanta disclosed that some payments were made under protest, as the company plans to explore legal remedies.

"The reason we are exploring our options is because we’ve seen also that there are some really misalignment[s] on timelines. There are several projects that are subject of the ERC's penalty order," NGCP assistant vice president and head of public relations Leonor Felipa Cynthia Alabanza told the panel.

Alabanza also cited hurdles and external factors as primary contributors to the delayed projects, including a Supreme Court ruling that prohibits the NGCP from implementing projects without the ERC's approval.

Nevertheless, she said they are currently “working on a way to reduce the actual delay on implementation.”