Cusi wants gov't takeover of power grid operations

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Energy Secretary Alfonso Cusi is pushing to take back control of the country's power grid operations as he accused the National Grid Corporation of the Philippines (NGCP) of failing to provide sufficient reserves. (FILE PHOTO)

Metro Manila (CNN Philippines, June 10) — Energy Secretary Alfonso Cusi is pushing to take back control of the country's power grid operations as he accused the National Grid Corporation of the Philippines (NGCP) of failing to provide sufficient reserves.

"Revert to government the system control of the grid for proper management of ancillary services," Cusi told Thursday's Senate hearing on the three-day rotating brownouts that hit parts of Luzon last week. He said this can be done through amendments to the NGCP's 50-year franchise.

Cusi blamed the lack of ancillary or support services for the power outages. He said his proposal would "make sure grid stability is achieved" through the availability of reserves.

"What we have right now is not a power crisis but a compliance issue," the Energy chief said.

"Kung nandoon po ba 'yung reserve, naging firm, [would we be here] discussing that problem of May 31 and June 1?" Cusi said, referring to some of the days the rotating brownouts happened. "Wala po siguro dahil meron po tayong enough capacity."

[Translation: If the reserve was there and it was firm, would we be here discussing that problem of May 31 and June 1? Maybe not since we would have had enough capacity.]

But the NGCP stressed additional reserves would not solve the country's power supply problem.

"Why is the problem with supply suddenly NGCP's responsibility?" NGCP President and CEO Anthony Almeda said.

"Ancillary services are support services needed to stabilize and manage the grid during momentary power supply imbalances... [It] is not extra energy nor is it replacement power for power plants that go down," he added.

The NGCP said the supply problem can only be remedied by putting up more power plants.

Both the DOE and NGCP said the red alerts issued last week - which would mean rotating brownouts - were caused by the unplanned outages and derated or reduced capacity of several power plants.

Cusi said four big power plants shut down, resulting in supply loss of around 6,000 megawatts. He stressed, however, that load drops would not have happened if there were enough reserves.

NGCP warns of higher electricity rates

The DOE said the NGCP failed to follow its order in 2019 to convert its contracts into firm contracts. But the NGCP said this would mean additional costs for consumers, as they will have to pay for ancillary services whether they are used or not. It said it now has the "best mix" of firm and non-firm contracts.

"On compliance, we are not resisting it," said NGCP spokesperson Cynthia Alabanza. "We only ask that the rate impact of this new directive be carefully and thoroughly studied by our regulators to ensure consumers that they only pay for what is needed and what is used."

The NGCP estimated an increase of ₱128 in the monthly electricity bills for each household consuming 200 kilowatts an hour in Luzon, an additional ₱108 in Visayas, and ₱278 in Mindanao, if it only has firm contracts.

However, Cusi argued that the pay-off would be worth it considering the heavy economic impact of power interruptions. Senator Sherwin Gatchalian, chairman of the Senate Committee on Energy, estimated that more than 705,000 consumers were affected, and there were over ₱116.8 million in economic losses from two days of rotating brownouts in areas covered by power distributor Meralco alone.

"The entire country might save in the process because the ₱116 million cost for that incident in May 31 and June 1 is highlighted," Cusi said.

"There is trading, it has to be traded that's why there is enough supply... so binibuild natin ang [we are building the] capacity, there can be trading, supply and demand will play, then the rates can be lower," he added.

Delayed transmission projects

Cusi also called out the NGCP for delays in projects that would add transmission lines, enabling Mindanao to share its excess power supply with Luzon.

Gatchalian agreed with the need for the projects. "There's a lot of stranded power everywhere," said the lawmaker, who also heads the Jont Congressional Energy Commission.

The NGCP admitted to the untimely implementation of the projects due to restrictions brought by the COVID-19 pandemic.

In his proposal to Congress, Cusi also seeks authority over these projects under the Transmission Development Plan currently being prepared by the NGCP.

CNN Philippines Correspondent Eimor Santos contributed to this report.