ERC slaps P12.3-M fine vs NGCP over 27 delayed projects

The Energy Regulatory Commission (ERC) has imposed a financial penalty against the National Grid Corporation of the Philippines (NGCP) for its supposed failure to deliver on schedule 27 transmission infrastructure projects across the country.

In a statement issued on Tuesday, the ERC, citing its 105-page decision issued November 26, said it found that the NGCP had failed to justify “significant delays in the implementation of 27 CAPEX (capital expenditure) projects.”

The projects that faced delays, according to the power industry regulator, include the following:

• Opol Substation Project
• Toril Substation Project (Phase 2)
• Hermosa-Floridablanca 69kV Line Project
• Agus 2 Switchyard Upgrading Project
• Panitan-Nabas 138kV Line 2 Project
• Cebu-Negros-Panay 230kV Backbone Project (Stage 1)
• Western Luzon 500kV Backbone Project (Stage 1: Castillejos-Hermosa 500kV Transmission Line Project)
• Tuguegarao-Lal-Lo (Magapit) 230kV Transmission Line Project
• Manila (Navotas) 230kV Substation Project
• Bataan-Cavite/Metro Manila Transmission Line Project (Phase 1) Feasibility Study
• La Trinidad-Calot 69kV Line Project
• Tiwi Substation Upgrading Project
• Naga (Cebu) Substation Upgrading Project
• Clark- Mabiga 69kV Transmission Line Project
• Bataan 230kV Grid Reinforcement Project
• Relocation of Steel Pole of Hermosa-Duhat 230kV Transmission Line Project
• Mariveles- Balsik (Hermosa) 500kV Transmission Line Project
• North Luzon Substation Upgrading Project (Stage 1 and 2)
• South Luzon Substation Upgrading Project
• Luzon Voltage Improvement Project 3 (Stage 2)
• Luzon Voltage Improvement Project 4 (Stage 1 Schedule 2)
• Tagbilaran 69kV Substation Project
• Visayas Voltage Improvement Project
• Mindanao Substation Rehabilitation Project (State 1 and 2)
• Mindanao Substation Upgrading Project
• Manila/Navotas-Doña Imelda 230kv Transmission Line Project
• Cebu-Negros-Panay 230kV Backbone Project Stage 2 (Cebu Substation 230kV Upgrading)

As it deemed the projects were delayed, the regulator said the transmission grid operator was “thereby ordered to pay administrative penalty totaling P12.3 million within 15 days of receiving the decision and reminded that the filing of a motion for reconsideration will not prevent the Decision from becoming executory.”

GMA News Online has reached out to the NGCP for comment and will update the story once a response has been received.

The ERC said the imposition of the financial penalty was “deemed appropriate” for the grid operator’s “unjustified failure” to implement its projects within the approved timeline.

“The Commission emphasized that the importance and urgency of these projects were central to its decision to approve NGCP’s CAPEX applications,” the regulatory body said.

"It must be emphasized that any delay and unrealized CAPEX project is prejudicial to the public. Respondent NGCP, itself, had argued numerous times in its applications that these projects will help ensure the quality, reliability, security, and affordability of the supply of electric power by accommodating the increasing demand of electricity. Failure to timely implement these projects, therefore, will have an impact on [the] reliability of the transmission system which it operates, and consequently, on the cost of electricity that consumers have to pay," the ERC said.

Moreover, the regulator said it rejected the NGCP's argument that its approved projects are not bound by its deadlines, noting that this "runs contrary to public policy."

"This would imply that Respondent NGCP has full discretion on when to finish its projects depending only on what suits its priorities," the ERC said.

The regulator had earlier penalized NGCP for alleged delays in completing 10 other CAPEX projects in an August 2024 decision, imposing a P3.5-million fine against the grid operator. — BAP, GMA Integrated News