Hontiveros backs proposal to give control of PH power grid back to gov’t

Hontiveros backs proposal to give control of PH power grid back to gov’t

Sen. Risa Hontiveros (PRIB)

By Ernie Reyes

MANILA — Senator Risa Hontiveros today backed proposals to restore to
government the system control over the Philippines’ power grid, to
help address rotating brownouts and various problems related to the
operations of the privately-owned National Grid Corporation of the
Philippines (NGCP).

Hontiveros made the statement after the Department of Energy (DOE)
proposed to the Senate to amend the NGCP’s legislative franchise and
“revert back to government” the system control of the country’s power
grid, to better manage ancillary services or the reserves for the grid
and fix cyber-security concerns in the power transmission sector.

“Paikot-ikot ang problema ng publiko ukol sa rotating brownouts,
habang mahal pa rin ang singil sa kuryente. It is time to review our
policies and empower government to make the necessary reforms since it
appears that privatization has not solved our country’s energy woes at
all,” Hontiveros said.

The senator noted that during the Senate probe of recent rotating
brownouts in Metro Manila and other parts of the country, the DOE
revealed multiple instances of the NGCP failing to comply with
government policies meant to ensure steady power supply in the nation.
Particularly, the NGCP has failed to comply with mandated ancillary
services or reserves which is one of the critical components in having
a more secured and reliable power system.

“In fact, matagal ng nagaganap ang mga rotational brownouts at
blackouts, 21 rotating brownouts in the country in 2019, 10 rotating
brown-outs in 2020, and 3 rotating brownouts in January to March 2021
here in Luzon”.

Despite the “compliance problem” of the NGCP, Hontiveros said that at
present, the penalty provision of the existing governing law – the
Electric Power Industry Reform Act EPIRA) or RA 9136 – allows the DOE
to take no action apart from recommending to Congress to revoke NGCP’s

“We should not stand helplessly on the sidelines as NGCP repeatedly
fails the Filipino people and does not deliver the services it is
mandated to provide. Government should be fully empowered to take over
the system control of the power grid if the NGCP continues to ignore
government policies and standards, especially in a time of crisis such
as today,” Hontiveros said.

Apart from operational issues, Hontiveros said that restoring control
of the power grid to government will facilitate a better review and
upgrade of the cyber-security of the power grid: “Huwag natin
kalimutan na sa kasalukuyan, ang NGCP ay 40 percent owned ng isang
Chinese state-owned corporation. It will be harder for the country to
protect our power grid from cyber attacks similar to those in the
United States, when our power grid operator is partly owned by

Hontiveros said that she will “completely” support any proposed
legislation that will be introduced in the Senate amending the
franchise of the NGCP, saying that the country’s energy needs must be
met, since the country continues to deal with the COVID-19 pandemic
and national elections are less than a year away.

Now more than ever, Filipinos need steady and affordable power. Hindi
pwedeng mahal na nga ang kuryente, lagi pang brownout. Sinisingil nila
ang taumbayan para sa transmission pero may 71 delayed at 83
uncompleted transmission projects. Ito ang dahilan kung bakit hindi
nagiging sapat ang suplay ng kuryente sa Luzon. We deserve better
power services, so we should demand better power services for
everyone,” Hontiveros said.

Moreover, ERC approved in its 3rd regulatory period a Weighted Average
Capital Cost of 15.04% for NGCP. Hontiveros said that this rate is
significantly higher compared to the WACCs of Indonesia at 2.3%,
Malaysia at 7.5% and Thailand at 7.2%.

She noted that 16.73% of NGCP’s revenues were used for operating
expenses or expenditure, 15.66% were return of capital, and a whopping
66.12% was pure profit.

“2015 pa ang huling regulation ng ERC. Wala ba silang nakikitang
pagbabago sa political and market risk para ipako sa 15% pa rin ang
WACC ng NGCP? Kailangang magdesisyon agad ang ERC at babaan ito. Kung
hindi, ay patuloy itong magiging pabigat sa ating mga kababayan na
nagpapasan nito sa ating binabayarang electric bill,” she concluded.

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