DOE's Cusi wants gov’t takeover of power grid operations

Irked by the alleged non-compliance and delays in the implementation of transmission projects, Energy Secretary Alfonso Cusi is proposing a government takeover of the country’s grid system operations from private sector-led National Grid Corp. of the Philippines (NGCP).

“Sa proposal ko, ibalik natin ang system operation po sa gobyerno ang [grid] system operation po para sa ganun po mas maganda ang pag-paplano, ma-address natin and ma-identify ang responsibility,” Cusi told the Senate committee on energy on Thursday.

(I proposed that the power grid operation should be returned to the government.so that we can plan better, address and identify the responsibility.)

Cusi made the proposal a week after the Luzon power grid was plagued by three straight days of Red and Yellow alerts, which caused a two-day rotating brownouts to maintain the grid’s integrity.

Earlier, the Department of Energy blamed the “forced or unplanned outages of power plants, and the lack of ancillary services owned or operated by the private sector.”

It also said that NGCP failed to comply with the required “firm” ancillary service contracts or reserves, which should be 4% of the power demand and could be tapped in case power plants go offline.

“It has been frustrating, now and again. Hopefully, the Senate would appreciate what the DOE has been talking about all these years. Firm contracted reserves are necessary because it is intended to provide safe capacity to the grid without reducing inventory,” Cusi told the Senate panel.

“It would also encourage new investments in building new power plants. For a plant to be put up, we need an assurance of a contract,” he added.

NGCP spokesperson Cynthia Alabanza earlier told GMA News Online that the grid operator fully contracted its ancillary services requirement, “needed to balance and stabilize grid operations, as required under the Philippine Grid Code.”

“The ancillary services are there, but they're being dispatched by the IEMOP (Independent Electricity Market Operator) as supply, because in times of deficiency like now, supply for consumption should be prioritized over reserve,” Alabanza said.

But NGCP’s ancillary service or power reserve contracts are on a “non-firm” basis which the DOE identifies as unreliable since the ancillary service provider decides if they will provide reserves.

With this, the DOE issued Department Circular No. 2019-12-0018 which mandated the system operator, NGCP, to comply with 100% firm ancillary service requirement.

“The NGCP should comply with its obligation to contract the reserve requirement on a firm basis and not put grid reliability and security at risk,” Cusi said.

Also, the Energy chief pointed out delays in the implementation of NGCP’s transmission projects.

Cusi said there are NGCP projects that were delayed less than one year, 11 were delayed for one year, 15 were delayed for two years in the Luzon grid.

There is also one project which was delayed for three and four years each, while two projects were delayed for five years in the Luzon grid. Three Luzon grid projects were also delayed for seven years and another two were delayed for eight years.

“Delays in connecting Negros and Panay to Cebu, and Mindanao to Visayas, which if were put in place by NGCP in time with the grid schedule, could have facilitated the importation of more energy to the islands of Luzon,” Cusi added.

He noted that in Mindanao there is a surplus of electricity supply, but cannot be delivered to other major islands due to  lack of transmission lines.

On the other hand, Senator Sherwin Gatchalian, chairman of the energy panel, said the delays may have caused economic losses and urged the Energy Regulatory Commission to penalize NGCP. 

For her part, ERC chairman Agnes Devanadera said she has already ordered NGCP to explain the delays in the completion of transmission projects. 

NGCP, meanwhile, said it will cooperate with the ERC and provide the agencies with the needed information. —LBG, GMA News