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Osmeña: Probe ERC, grid grift



The Senate Committee on Energy should look into the possibility of a collusion between the Energy Regulatory Commission (ERC) and National Grid Corporation of the Philippines (NGCP) and its cause to the persistent power outages in the country, former Senator Sergio Osmeña III said on Thursday.

Osmeña, who previously served as chair of the panel during his stint in the Chamber, said it is “impossible” for the country’s electricity concessionaire to continue committing violations if the regulatory body is performing its mandate over the power firm.

“I think that the Senate committee on energy should call a hearing into the allegations that ERC has been too lax in oversight of the NGCP,” he said.

NGCP, a private consortium mandated to operate and secure power supply reserves or ancillary services, took control of the country’s power transmission assets in 2009 for a 25-year agreement. It is under the ERC.

Energy Secretary Alfonso G. Cusi earlier pointed at the failure of NGCP’s compliance with its mandated obligations as the reason for the thinning power supply in the country.

In a Senate inquiry on the spate of power interruptions that affected Luzon last month, the Energy chief said the NGCP had failed to secure enough power reserves necessary to augment supply in case of unforeseen power plant outages and proposed that the government takes back the authority over the country’s power grids.

Osmeña agreed, saying 70 percent of the country’s electricity issues came from the NGCP.

He added that the ERC is equally liable to the electricity issues continuously plaguing the country.

The former lawmaker then proposed that the Senate investigate the particular violations the ERC has committed; probe why it let the NGCP delay several projects including the layout of transmission lines connecting the country’s major islands; ask why monopoly like NGCP was awarded 15 percent weighted average cost of capital; and why it is still not conducting an initial public offering (IPO) despite its supposed compliance in 2012 or 2013.

“Why are they allowed to have it delayed? Since we are looking at it, you look at the return of NGCP. They have too many returns already but that would not have happened if the ERC is regulating them,” he said.

“I feel that there is some collusion here and shall we say, for the lack of better term… regulatory capture because it is impossible for the NGCP to go on for long if not,” he added.

Osmeña also pushed for Congress to implement massive reform in the existing ERC once the investigation is complete. He emphasized the need to have a “new ERC” to audit NGCP and other power companies.

“If the ERC today is not doing well then you can change it and put in a new (body). But first, let us investigate the old ERC then see what kind of changes are needed,” he said.