Press Release
June 11, 2021

Hontiveros: Give control of PH power grid back to govt

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 franchise.

"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 foreigners."

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.

News Latest News Feed