NGCP, power firms told to adjust capex amid COVID

Danessa Rivera (The Philippine Star) - June 17, 2020 - 12:00am

https://www.philstar.com/business/2020/06/17/2021335/ngcp-power-firms-told-adjust-capex-amid-covi

MANILA, Philippines — The Energy Regulatory Commission (ERC) has ordered distribution utilities (DUs) and the National Grid Corp. of the Philippines to adjust their capital expenditures after the coronavirus disease 2019 or COVID-19 pandemic drastically changed the country’s demand profile.

The directive covers Manila Electric Co., the Philippine Electric Plant Owners Association Inc. (PEPOA), Philippine Rural Electric Cooperatives Association (PHILRECA) and the National Association of General Managers of Electric Cooperative Inc. (NAGMEC), and the National Grid Corp. of the Philippines (NGCP).

The DUs were directed to review and reassess their respective applications for capex to include the changes in the demand profile and the effects of the current pandemic to the energy system.

“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,” ERC chairperson and chief executive officer Agnes Devanadera said in a statement.

ERC is implementing measures that will mitigate the impact of the COVID-19 pandemic for all energy stakeholders, especially the consumers.

This is why the power regulator directed the DUs and the NGCP to review the assumptions used in its applications and update the various capex projects pending before the commission.

In reviewing their applications, DUs and the NGCP should consider the demand forecast of the areas where the proposed projects will be implemented, the timetable for the implementation of the proposed projects and the possible course of action of DUs to address the concerns at hand.

“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,” Devanadera said.

The Department of Energy also ordered DUs to submit their updated 2020 to 2029 distribution development plans by the end of the month.

A DDP outlines a DU’s long-term and immediate objectives and includes technical and economic analyses, power supply contracts and profile of customers to be energized.

Originally, DUs are required to submit their DDPs to the DOE on March 15 of every year. The DOE extended the deadline due to the implementation of the enhanced community quarantine in several areas in the country due to COVID-19.