ERC orders review of NGCP operations

by Lenie Lectura, February 5, 2015
from BusinessMirror

THE Energy Regulatory Commission (ERC) has ordered the review of the operations of the National Grid Corp. of the Philippines (NGCP) to ensure if it has complied with its task to operate, maintain and expand the country’s power-transmission system.

A three-page resolution signed by ERC commissioners authorizes the Philippine Electricity Market Corp. (PEMC) to conduct an independent review of the operations of NGCP. The review shall be done by an independent third party.

“The commission, after thorough and due deliberation, resolved, as it hereby resolves, to authorize the PAC [PEMC Audit Committee], through an independent third-party reviewer, to conduct an independent review of the operations of NGCP,” the resolution stated.

The NGCP is a privately owned corporation in charge of operating, maintaining and developing the country’s power grid.

It transmits high voltage electricity through “power superhighways” that include the interconnected system of transmission lines, towers, substations and related assets. The consortium holds the 25-year concession to operate the country’s power-transmission network and is comprised of Monte Oro Grid Resources Corp. led by Henry Sy Jr., Calaca High Power Corp. led by Robert Coyiuto Jr., and the State Grid Corp. if China as technical partner.

The NGCP is the system operator (SO), while PEMC is the market operator of the Wholesale Electricity Spot Market (WESM), the country’s trading floor of electricity.

The SO, in coordination with the MO, significantly contributes to the development of procedures and processes, and assists in any aspect of the WESM operations.

The ERC said that a yearly audit has been conducted on WESM market operations from 2009 to 2013. However, operations of the SO were not included in the audit scope.

“The independent external auditors on the annual market operations audits have consistently and strongly recommended the conduct of an SO review considering the significance of its operations, processes and input data to the overall efficiency and effectiveness of the WESM,” the ERC said.

The clamor for an audit on NGCP’s operations, according to the ERC resolution, has something to do with the recent events in the electricity industry that “have shown that transmission issues have affected the rates charged to consumers.”

The transmission charge is one of the components of an electricity bill.

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