Perez warns of massive blackouts if transmission system is not upgraded

Energy Secretary Vincent S. Perez warned yesterday that the recent power outage that hit New York City, portions of Northeast America and Canada may happen in the Philippines if the country’s transmission system will not be upgraded and expanded.

"The outage in New York reminds us how critical our electric transmission service is to the economy," Perez said, noting a Wall Street Journal report that the 29-hour blackout could cost the US economy to about $6 billion, with retailers and airlines being hit hardest.

Perez said "we are fully aware of the economic damage of power outages because we have had several power blackouts in the past. We should not wait for another incident before we rehabilitate and modernize our power delivery system. We need to pursue the privatization of our power sector and we hope our senators will pass the Transco franchise bill."

Rep. Cirilo Alipio Badelles, chairman of the House committee on Energy, echoed calls to speed up privatization of the National Power Corp.’s (Napocor) transmission assets. The newly- created National Transmission Corp. (TransCo) is the entity in charge of Napocor’s transmission assets prior to its privatization.

"The blackout in New York and other areas due to an aging transmission grid should compel Senate to pass the much delayed Transco franchise bill," Badelles said.

Perez said the privatization of the transmission and generating assets of Napocor is crucial because the government, at present, is hard pressed in financing projects that will keep the country’s electricity network efficient and reliable.

"Upgrades to our Philippine transmission system will require huge investments which only the private sector could provide," Perez said.

Estimates show that Transco will need to invest at least P109.4 billion in additional capital expenditures over the next 10 years to modernize the entire grid.

Perez noted that several countries recently experienced severe power failures due to antiquated infrastructure and soaring demand for electricity. In June, Italy was hit with a massive power blackout, the first in 20 years, plunging millions of people into darkness. Early this week, Georgia was without electricity for about 15 hours after problems occurred in one of its high voltage transmission lines located in western Georgia.