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ERC GRILLED ON SLOW TRANSMISSION ASSETS DIVESTMENT

Disturbed by information of life-threatening incidents of service outages in hospitals, ANAKALUSUGAN Party-list Representative Ray Florence Reyes questioned officials of the Energy Regulatory Commission (ERC) on the quality of power given to various utilities for distribution to health facilities and household connections in a budget hearing last week at the Lower House.

This eventually led to the discovery of the “turtle-paced divestment” of government transmission assets as provided for by Republic Act No. 9136 otherwise known as the Electric Power Industry Reform Act (EPIRA) of 2001.

ERC Acting Director for Regulatory Operations Service Engineer Legario Galang Jr. bared that the National Transmission Corporation (TRANSCO) owns the assets but is operated by the National Grid Corporation of the Philippines (NGCP).

“Lives are on the line here. Patients in hospitals expire because of government incompetence. The government regulator, in this case, ERC appears to be remiss in the pursuit of their mandate,” Reyes observed last Thursday.

The EPIRA Law aimed at providing affordable and reliable electricity to Filipinos. It, therefore, divided the industry into operational segments and sold State assets to interested power stakeholders. But growing dismay on repetitive power outages mainly due to slow progress in the sale of State-owned sub-transmission assets pushed Rep. Reyes to question the maintenance and ownership of the assets.

ERC Acting Director for Regulatory Operations Service Engineer Legario Galang Jr. bared that the National Transmission Corporation (TRANSCO) owns the assets but is operated by the National Grid Corporation of the Philippines (NGCP).

“There is already a disconnect. TRANSCO owns the assets, but the NGCP operates them. So, therefore, we can’t determine who really is accountable for ensuring proper maintenance and power quality down the line?” Rep. Reyes queried.

“Under the EPIRA, the sub-transmission assets are supposed to be divested. But this is not supposed to be divested to NGCP given that they are already the monopoly operator in transmission. These are supposed to be divested to other interested parties particularly to distribution utilities,” Rep. Reyes added.

Section 8 of the EPIRA law states that no other entity aside from TRANSCO and the Power Sector Assets and Liabilities Management Corporation (PSALM) will be allowed ownership or management participation in the sub-transmission entity.

“What is NGCP’s part in opposing divestment? Are they not for it because of mere valuation? NGCP has nothing to do with that. That’s not even part of their asset base. It’s going to part of the utility or the consortium of utilities formed to acquire these.”

ERC Chairperson Monalisa Dimalanta responded that low voltage system assets had already been transferred, but NGCP as a system operator has the authority, mandate, and responsibility over high voltage system assets.

“There have already been sub-transmission assets that have been turned over, but there are those that remain in limbo,” Chair Dimalanta responded.

Rep. Reyes further inquired about the divestment cases filed at ERC which uncovered NGCP’s involvement in the denial of some cases.

“What is NGCP’s part in opposing divestment? Are they not for it because of mere valuation? NGCP has nothing to do with that. That’s not even part of their asset base. It’s going to part of the utility or the consortium of utilities formed to acquire these,” Rep. Reyes pressed.

It was also revealed, out of Reyes’ questions, that denial of divestment cases is mainly due to the concession fees being charged by NGCP. Galang also defended the agency and said that the corporation’s opposition is “just part of the process” and that the agency treats it as “like any other intervention.”

Reyes, however, corrected the assertion and said, “there is commercial interest on NGCP’s end. That right there is a conflict of interest. It’s been 21 years since the passage of the law. This is long overdue.”

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