Energy regulator pushing for system audit of National Grid

by The Standard Business –  May 26, 2016 at 11:30 pm

from Manila Standard Today

Energy Regulatory Commission chairman Jose Vicente Salazar expressed confidence National Grid Corporation of the Philippines will push through with its earlier commitment to back the system audit of the country’s power grid system.

Salazar said the audit would be the first compliance assessment of NGCP since receiving the franchise to operate, maintain and expand the country’s power transmission system in 2008.

The audit aims to assess how NGCP is operating the grid, how it is maintaining the reliability of the country’s transmission system, and how its operations comply with regulations concerning the wholesale electricity spot market.

Salazar issued the statement amid reports that NGCP “appears to be reluctant to pursue its earlier commitment to fully cooperate with the audit.”

Salazar said the ERC was concerned that delays in the audit of NGCP “could adversely affect the processing of the applications for its capital expenditure and revenue requirements” pending before the regulatory body.

“It is important that we have a clear assessment first of how it is doing its job before we consider the NGCP’s petition to raise the level of revenues it is allowed to make and to use money on capital expenditures,” Salazar said.

He said the performance audit of the NGCP was also crucial “to the country’s bid to ensure that the whole power supply infrastructure from generation to distribution to industries and households continue to be efficient, reliable and cost-effective.”

Salazar said the audit of the NGCP was set to be done by an independent third party to be procured by NGCP itself.

“I am sure the NGCP understands the importance of this independent audit to our shared aspiration to further improve the power transmission infrastructure of the country and to speed up the processing of their requirements,” Salazar said.

The NGCP has asked the ERC to raise its maximum annual revenue to P45.2 billion and grant its application for additional capital expenditure of P8.05 billion in 2016.

Salazar said the audit of the NGCP would also boost the transparency of the regulatory process in the power sector.

“The customers of the power sector demand to know how the important industry players are performing in order to assess the value they get for the money they pay for power,” Salazar said.

“Since the NGCP is being run by some of the country’s most respected business leaders, I am sure that it knows the importance of a transparent audit,” Salazar added.

He said the ERC was duty-bound under existing laws to ensure such audit took place.