ERC pushes audit of national power grid

MANILA, Philippines – The Energy Regulatory Commission (ERC) has expressed confidence the National Grid Corporation of the Philippines (NGCP) will push through with its earlier commitment to back the system audit of the country’s power grid system.

ERC chairman Jose Vicente Salazar said the audit will be the first compliance assessment of the NGCP since it was given 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 also allayed concerns NGCP“appears to be reluctant to pursue its earlier commitment to fully cooperate with the audit.”

He said the ERC is concerned 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 explained.

He said the performance audit of the NGCP is 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.”

He also explained that the audit of the NGCP is 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 (MAR) to P45.2 billion and to grant its application for additional capital expenditure of P8.05 billion for the year 2016.

Salazar said the audit of the NGCP will 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.