NGCP Fined For Project Delays

The National Grid Corporation (NGCP) has been fined for project delays in its transmission projects that have negatively impacted the public, according to the Energy Regulatory Commission (ERC), which set a fine of P3.5 million against the company.

In its decision, the ERC emphasized the grid operator’s obligation to adhere to the project timelines approved by the ERC when it applied for the CapEx projects. I Photo: National Grid Corporation of the Philippines

The project delays are expected to revive another Senate hearing on NGCP, following revelations last year that the company was issuing hefty dividends to its shareholders.

NGCP in 2019 declared dividends of P15 billion to its shareholders out of its reported earnings of P20.3 billion, and in 2017, it declared P19 billion out of its P20.6 billion earnings, leading Senator Raffy Tulfo to remark, "mapapasana all" ka.

Business groups have suggested that the declaration of huge dividends for the NGCP shareholders could have delayed the early implementation of the transmission projects.

The ERC said that NGCP failed to complete 10 transmission projects for which it sought CapEx approval.

The government agency also indicated that it is releasing another finding against the company, which is listed on the Philippine Stock Exchange as Synergy Grid and Development of the Philippines, the majority owner of the transmission firm.

The regulator cited “unjustified delays in implementing CapEx (capital expenditure) projects,” according to a statement issued on Saturday, detailing a decision made on June 25 and promulgated on Aug. 31.

The ERC stated that the NGCP failed to meet the approved project timelines for the Baloi-Kauswagan-Aurora 230-kilovolt (kV) Transmission Line Project (Phase 2) – (Kauswagan-Lala 230-kV T/L Project), the Pagbilao EHV (extra high voltage) Substation Project, the Antipolo EHV Substation Project, the Tuy (Calaca) – Dasmariñas 500-kV T/L Project, the Cebu-Lapu-Lapu Transmission Project, the Cebu-Negros-Panay 230-kV Backbone Project Stage 3, and the Tacurong-Kalamansig 69-kV Line.

The ERC said that a separate decision covering 27 more CapEx projects under investigation will be issued separately.

In its decision, the ERC emphasized the grid operator’s obligation to adhere to the project timelines approved by the ERC when it applied for the CapEx projects.

In issuing the fine, the ERC stated: “It must be emphasized that this is not an issue of whether or not these CapEx projects have a rate impact on consumers because any delay and unrealized CapEx project is prejudicial to the public.”

“This is especially true for NGCP’s CapEx projects since NGCP serves as the sole concessionaire for the operation of the transmission system. Any inexcusable delay on these projects will have a far-reaching impact on our nation’s electric power quality, reliability, security, and affordability,” it added.