Regulatory failure

The power crisis in the Visayas is the consequence of regulatory failure on the part of the Department of Energy and the Energy Regulatory Commission (ERC).

During the joint congressional hearing in Bacolod City, Energy Secretary Sharon Garin had no choice but to admit that the Visayas power crisis is rooted in serious “planning lapses” from the government’s side.

That’s nothing new. I have been saying that for years. The DOE has also long been criticized by consumer advocacy groups for “paper planning.”

For years, regulators left plants that had been broken down for years on the official list of the grid’s dependable capacity. By counting “phantom megawatts” that physically could not run, the DOE artificially inflated the region’s safety margin. It justified their doing nothing because, on paper, the grid looked fine.

Lawmakers pointed out that the DOE failed to accurately project regional growth, leaving the Visayas region with no new major baseload capacity for a prolonged period. Worse, DOE failed to properly react to the bad performance of the Panay power plants through the years.

The Grid alerts in September showed the extent of this DOE negligence. One such alert showed: Available Capacity - 2,153MW; Peak Demand - 2,462MW; 12 plants on forced outage for the month of September, four plants since August 2026, one plant since July, two plants since June, seven plants since May, three plants since 2025, two plants since 2024, two plants since 2023 and one plant since 2021, while 13 plants were running on derated capacities, totaling 1,075.2MW unavailable to the grid.

That’s plain and simple sleeping on the job. Imagine three plants have been completely offline since 2025, two plants since 2024, two since 2023 and one since 2021. That’s negligence.

The DOE had more than enough time to secure alternative power sources. The power barges should have been stationed in the area earlier.

Because regulators rarely issue severe financial penalties or revoke operating permits for chronically broken facilities, generation companies face very little pressure to properly maintain their plants or fix them faster.

The best penalty is to require the owners of the non- performing plants to pay for alternative power sources.

There are other planning and regulatory failures of DOE even before Sec Garin took over. Here are a few:

Allowing demand in Cebu to outpace new power projects. Secretary Garin admitted that Cebu’s electricity demand has been growing exponentially, but the approval and delivery of new generation projects stalled.

The government failed to incentivize or fast-track permanent baseload builds early enough, leaving the grid catching up to a massive deficit.

It was a serious planning blunder to focus on the Mindanao-Visayas Interconnection Project (MVIP) and Luzon subsea cables instead of building local power plants. The DOE wrongly assumed the Visayas could indefinitely rely on surplus power imported from Luzon and Mindanao.

Indeed, Mindanao and Luzon experienced their own simultaneous plant outages and grid constraints. The Visayas needs local generation. There should be baseload plants in each major Visayan island.

Then DOE aggressively approved solar projects particularly in Negros without mandatory battery backups. This created a highly imbalanced grid that plunges into a severe shortage as the sun sets and the evening peak begins.

The DOE and the ERC also failed to establish the regulatory framework and fast-track the commercial testing rules required to put battery systems into immediate service. Energy regulators allowed bureaucratic grid-compliance backlogs to drag on for months while the Visayas routinely plunged into darkness.

The government has also been ignoring the increasing unreliability of our aging coal power plants. As a result, the DOE’s assumptions of plant reliability leave no safety cushion.

Because there was zero local buffer planned, when six major power plants are simultaneously down, the additional unscheduled loss of even a single unit automatically triggered yellow or red alerts.

These multi-year planning lapses, Secretary Garin admitted, means there is no instant fix. It takes six or more years to bring new baseload generation online. Getting the permits alone often takes five years through DENR and LGUs.

Under the EPIRA, the DOE and ERC have the police power to penalize power plants for prolonged, unexcused outages. But they have treated the generators with kid gloves.

By failing to act on plants that have been dead for years, the DOE effectively turned a chronic systemic disease to an emergency.

Now in panic mode, DOE is scrambling for solutions including forcing Congress to pass emergency powers and import barges long after the damage to consumers was already done.

As usual, the DOE is pointing fingers at NGCP for its supposed failure to sign ancillary contracts with BESS operators last May. But what good will that do?

Any readily available megawatt a BESS operator is producing is presumably needed to power the Visayas Grid and cannot be contractually set aside for ancillary. I understand NGCP has existing ancillary contracts but were dispatched as energy, no longer as ancillary because of the shortage.

At best, a 50-MW BESS like the one Citicore is moving from Batangas to Silay, will generate four hours of juice as the sun sets. The other potential BESS operators DOE identified were reportedly not ready to sign ancillary contracts.

The math and physics of the grid is clear: a battery system cannot create “fresh” power because it merely stores. The Visayas grid absolutely needs new baseload generation.

The DOE should allow NGCP to put up its own solar with BESS to be used as ancillary so we can be sure it is separate from what is already connected to the grid. That also gives NGCP total responsibility and saves consumers from high priced negotiated take-or-pay ancillary contracts.

What is happening in the Visayas is going to happen to Luzon and Mindanao unless the government improves its planning and regulation. We are doomed.

Boo Chanco’s email address is [email protected]. Follow him on X @boochanco