ERC pleased with NGCP explanation on project delays

MANILA, Philippines — The Energy Regulatory Commission (ERC) says it is pleased with the detailed explanation submitted by the National Grid Corp. of the Philippines (NGCP) on the delays in the completion of its various transmission projects.

The ERC had issued a show-cause order to NGCP on July 4, requiring an explanation for delays in the completion of 37 projects, in which 26 are still uncompleted and three have yet to commence.

“NGCP has complied. They have submitted their explanation. Very detailed. We are very happy with their explanation in terms of substance of information and we are continuing to evaluate the justifications they have submitted,” ERC chairperson and CEO Monalisa Dimalanta said.

“What’s important here is that it was a very detailed explanation and we can work together with Department of Energy (DOE) to identify areas where we can assist on right-of-way issues and on other issues that the delayed projects have suffered, so that it’s not just penalties that we can talk about. It’s really solutions to realizing all these projects,” she said.

Aside from right-of-way issues, the COVID pandemic had also been previously cited by NGCP as among the factors that affected the completion of some of its projects.

NGCP said that while access to funding was never a problem for the company, external limitations, including regulatory caps on capital expenditures, protracted permitting processes by the local government units, and difficult rights-of-way procurement have been the primary roadblocks to project completion.

Meanwhile, Dimalanta said NGCP is also set to complete very soon the review of the company’s fourth regulatory rate reset.

“We expect to complete the transmission rate reset review for NGCP for the years 2016 to 2020 in the next few days, and this will cover the fourth regulatory period for the transmission operator,” Dimalanta said.

“We are also completing the review for the fifth regulatory period. So we are trying to catch up,” she said.

The last transmission reset completed by the ERC was for the five-year regulatory period covering 2010 to 2015.

The reset is a regulatory exercise to check whether the allowed revenues of NGCP, which were approved seven years ago and on which NGCP has based its charges to the customers, are still valid and reflective of the current costs.