ERC chides TransCo over project implementation

The Energy Regulatory Commission (ERC) has chided the National Transmission Corp. (TransCo) for stating that it will go on with its capital projects even if the ERC has not yet decided on its applications.

TransCo’s Jules Alcantara earlier issued a statement implying that the ERC’s failure to decide on its capital projects application is "a cause of delay for implementing urgent projects."

TransCo has 37 capital projects pending ERC approval but were already started without the ERC’s go-signal as required by the Electric Power Industry Reform Act (EPIRA).

"These projects have implications on the rates of end-consumers. The ERC is merely doing its job of ensuring that the projects will not be prejudicial to stakeholders of the electric power industry. The ERC is certain that this is also a concern shared by TransCo," ERC chairman Rodolfo Albano said.

Albano pointed out that "the ERC has not issued any order to stop construction of TransCo’s projects but has instead imposed a P9.4-million penalty for not seeking prior ERC approval as required by the EPIRA."

"The ERC believes that such observations, along with many others that TransCo had been making in the past few weeks should instead be ventilated in the ongoing hearings on the applications of TransCo for a more constructive resolution of its concerns. We do not in any way appreciate that they go to the media first at the risk of putting ERC in a bad light," he said.

"In the course of public hearings and evaluation, the ERC sees to it that consumer interests are protected by ensuring that the technical specifications and size of TransCo’s projects are not in excess of what is needed now and in the immediate future and that the award of a project to a contractor was conducted under a fair, transparent, competitive bidding process and that the construction implementation schedules observed cost-effective use of equipment and resources," the ERC chief said.

Consumers will benefit from the ERC’s "optimization" process that is designed to disallow contract items found to be in excess or too early for the needs of the present and the immediate future. The items disallowed by the the ERC will not form part of the rates to be charged to TransCo customers.

TransCo should have anticipated that there are pre-requisites in undertaking capital projects, and thus, should not accuse the ERC of being a potential cause of delay in the projects that it wants to implement, Albano stressed.

"Again, the ERC has not issued any order to prevent TransCo from proceeding with its capital projects. It only asks TransCo to comply with the requirements set by law and to pay the penalties borne out of its violation," he said.