EconomyEditor's PickGrid operator to appeal P5.1-million ERC fine

November 10, 2022

THE National Grid Corp. of the Philippines (NGCP) will appeal a P5.1-million fine imposed by the Energy Regulatory Commission (ERC) over its alleged failure to procure adequate reserve power, the NGCP’s 40.2% shareholder Synergy Grid and Development Philippines, Inc. told the exchange.

In a disclosure on Thursday, Synergy said the NGCP intends to file a motion for reconsideration within the period prescribed by the ERC. The NGCP is the sole operating asset of Synergy.

The ERC on Oct. 27 ruled that the NGCP failed to comply with an order by the Department of Energy (DoE) to maintain sufficient power reserves for use by the grid, part of a long-running dispute with regulators about the appropriate level of reserves to keep on hand should power plants fail.

Reserve power is engaged through so-called “ancillary services” contracts agreed with standby providers, who will start feeding power onto the grid when the levels of baseload power decline below recognized margins of safety.

In a statement issued on Viber, the NGCP described the decision as “fault-finding” by the regulator, which could come at a cost for consumers. It also alleged that “certain players in the industry,” which it did not identify, are conducting an “orchestrated campaign” against the grid operator.

The ERC, in a 20-page ruling, warned that it will recommend that Congress revoke NGCP’s franchise if it fails to comply with the ruling and added that it will also impose additional penalties including a possible cancellation of the company’s certification of public convenience and necessity.

The ERC has directed the NGCP to comply with its decision within 30 days from the receipt of its decision.

“No amount of monetary penalty can sufficiently equate to or compensate for the willful disregard by NGCP of validly issued regulations of the Philippine government and its administrative agencies,” the ERC said in a statement.

The NGCP, however, rejected claims that it intentionally disregarded the DoE orders, saying that its actions need to be seen in the context of the “overtly biased and intrusive political atmosphere” accompanying the rulings. — Ashley Erika O. Jose

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