ERC orders co-ops, NGCP to update power projects

By Lenie Lectura June 17, 2020

https://businessmirror.com.ph/2020/06/17/erc-orders-co-ops-ngcp-to-update-power-projects

The Energy Regulatory Commission (ERC) on Tuesday directed all distribution utilities (DUs), electric cooperatives (ECs) and the National Grid Corp. of the Philippines (NGCP) to submit an updated capital expenditure (capex) program.

ERC Chairman and CEO Agnes VST Devanadera said there is a need to review and reassess their respective capex applications to include the changes in the demand profile and the effects of the current pandemic.

A letter was sent to the Manila Electric Co. (Meralco), NGCP and the DUs’ associations, particularly the Philippine Electric Plant Owners Association Inc. (PEPOA), Philippine Rural Electric Cooperatives Association Inc. (PHILRECA) and the National Association of General Managers of Electric Cooperative Inc. (NAGMEC).

“The Commission noted that the assumptions and forecasts used by the DUs and the NGCP for their proposed projects may need to be adjusted, including the timelines or the projects themselves, as the same may no longer be realistic under the current demand and supply scenario,” said Devanadera.

The ERC recently resolved to determine measures that will mitigate the impact of the Covid-19 pandemic for all stakeholders especially the consumers. This is in keeping with the sensitivity of the challenges the global order is facing due to the prevalence of the Covid-19 pandemic. Thus, the Commission directed the DUs and the NGCP to review the assumptions used in its applications and update on the various capex projects pending before the commission.

The factors they must consider in re-assessing their capex projects include the demand forecast of the areas where the proposed projects will be implemented; timetable on the implementation of the proposed projects; and possible course of action of DUs to address these concerns.

“We expect to receive the DUs and the NGCP’s compliance to our directive within 30 days from receipt of the subject letter through email. We trust that the regulated entities will extend their usual support to the Commission by assisting us in determining the necessity and timeliness of these capex projects and its possible impact to the electricity consumers given the unprecedented situation brought about by the global pandemic,” said Devanadera.

Meralco had already reduced its network capex to P9.34 billion this year, from P17.84 billion, as various projects were stalled by the enhanced community quarantine (ECQ).

“Because of the ECQ, the design, engineering, and construction, and even procurement of our capex project have been delayed that we had to recast our budget from P17.84 billion to P9.34 billion. This is only for the network side,” said Meralco First Vice President and Head of Networks Ronnie Aperocho.

PHILRECA said it will also comply with the ERC directive.

“We are confident that the ECs can comply with the request of the Commission since the ECs already came up with their respective EcRM-SP or the Electric Cooperative Risk Management and Sustainability Plan.

We believe that in preparing the EcRM-SP they already reviewed, assessed and considered the possible revisions in their capex applications,” PHILRECA General Manager and Executive Director Janeene Depay-Colingan said via SMS.

The group likewise appealed to the ERC to “promptly act on the said capex applications” since it has significant impact on the operations of the ECs.

Power supply

Meanwhile, the Department of Energy directed all DUs and ECs to ensure that households in the provinces are getting stable and sufficient power supply as schools shift to blended learning program.

“I have given my order to all cooperatives through National Electrification Administration Administrator Edgardo R. Masongsong to ensure stable supply of power in their respective franchise areas,” Energy Secretary Alfonso G. Cusi said.

“This directive is not only to help the students as they attend online classes but a sufficient and stable supply of electricity at this time is what businesses need as we revive the local economy.”

Cusi said his office has received reports that in the ongoing summer classes, several power interruptions were experienced in rural areas. “It was brought to my attention that some students from General Santos and North Cotabato were not able to join online summer classes and submit assignments on time due to power interruptions, and not due to Internet connectivity.”

According to a Department of Education memorandum, remedial, enrichment and advancement classes for summer 2020 started on May 11. It included Saturday classes and will end after a six-week period.

Meralco spokesman Joe Zaldarriaga said the utility firm will comply with the directive of the DOE. “In fact, we have already been reviewing our Distribution Development Plan for submission by the end of the month.”