Gatchalian: 'Concrete grounds' show NGCP 'negligence' in Panay blackout

After the Senate energy committee’s first investigation into the massive blackout that hit Panay Island, Senator Sherwin Gatchalian said that there are “concrete grounds” that show National Grid Corporation of the Philippines (NGCP) negligence.

“There are grounds, there are definitely concrete grounds to say that they are negligent,” Gatchalian, vice chairman of the panel, said in an ANC interview.

Although he is still waiting for the results of the Energy Regulatory Commission’s (ERC) investigation into the matter, Gatchalian said the information revealed during the hearing convinced him of the state grid operator’s negligence.

“We need to go deeper into that, who in NGCP was negligent. And what happened? Are they undertrained? Are they understaffed? Are people not at work because it's January 2? Those are the things that we need to look at,” he added.

Contrary to the position of the NGCP that it only followed normal protocols when the Panay Energy Development Corporation 1 was down because their data showed normal voltage and frequency limits, Gatchalian reiterated his explanation that the state operator should have reduced the demand when the Philippine Grid Code dictates that the supply is no longer in a normal state.

“One of the plants went down and then that should have prompted NGCP to already balance out the grid to prevent a widespread collapse of the system, but they didn't do that. That's why the other plan, six other plants tripped because the system was imbalanced or unbalanced anymore,” he explained.

Gatchalian pointed out anew that NGCP could have resorted to manual load drop but it appears that “NGCP failed to follow those protocols.”

In his personal assessment, Gatchalian said the incident can also be attributed to human error.

“There are things like human error… Is it the supervisor, is it the operator who calls the shots at that particular time? Is that person well-trained? Is that person well-versed with the Grid Code? Is that person well-versed with the protocols? That is something that we need to go deeper into,” he said.

Apart from this, Gatchalian said there is also a need to check if the NGCP used its reserves to prevent the massive blackout.

“Obviously, the reserve didn’t fit in for two hours, so is that something that we need to look at? It's a very technical issue that we need to address and to go deeper into,” he said.

Under the Philippine Grid Code, Gatchalian noted that the state grid operator should not secure not less than 100% reserves.

Anything less than 100% is a violation of NGCP’s franchise.

Should the Mindanao-Visayas Interconnection Project and the Cebu-Negros-Panay Interconnection Project be completed, Gatchalian said the Panay Island could have avoided such situation.

Meanwhile, Gatchalian warned against recommendations to revoke NGCP’s franchise.

“Us, as legislators, we need to also be very careful in our recommendation, whether to revoke the franchise because this is a very technical operation. And there are operators around the world who will operate this asset, but we cannot just abruptly terminate and get someone to come in. It will take time,” he explained.

“There's a contract between NGCP and the government and of course the contract also protects the interests of NGCP. So, while we can revoke the franchise, we also need to be mindful that NGCP can file cases against government and trigger an arbitration and that will create a lot of problems, not only corporate problems, but operationally, because my thought, my worry it might cascade operationally,” he added.

Senator Francis Escudero also issued a similar statement, saying legislators should not be “too light-handed about franchise revocations lest it is perceived as a sword of [Damocles] hanging over all franchise holders whenever they do something wrong or displease the powers that be.”

The lawmaker said there should be a “more sober method of exacting accountability on those that may be found liable and, more importantly, to find solutions to prevent similar situations.”

“For me, the NGCP (given its delayed projects) shares the blame; [Palm Concepcion Power Corporation] for shutting down without following the Grid Code values; Government for not monitoring, supervising and penalizing power plants and NGCP given its nature as an oligopoly and monopoly; and updating of the Grid Code in order to more accurately reflect the needs of the industry,” Escudero said.

Gatchalian suggested crafting an enabling law that will enable the government to have an oversight capacity over the system operator.

He also proposed a careful study on the contact between the NGCP and the government, saying another franchise might be needed to separate the system operator and the transmission network operator.

“The contract contemplated a unified model, meaning you have the system operator and the transmission network operator in one and that is a contract and that's what we are paying NGCP. But definitely now if we separate them that's in effect, touching the contract and we have to study that angle, but in concept, I support that transmission owners, transmission expansion should be with the private sector, because the government should not put in the money to expand that,” he said.

“But in terms of system operator meanings, operating that system, because of market power, because of national security, it's important that the government has to say whether 100% or 60%, but it's important that the government has a say in that operation,” he added.

Panay Island was hit by a massive power outage last week due to multiple tripping of power plants on the island.

The ERC earlier said the island power situation had returned to normal as affected power plants in Iloilo were working again.

The DOE blamed the NGCP for the power outage and expressed support for a review of the grid operator’s congressional franchise.

Even President Ferdinand ''Bongbong'' Marcos Jr. on Friday stressed that accountability lies with the NGCP given that the agency is tasked to ensure grid stability. The President said NGCP had time to prevent the massive power outage in Panay Island.

The provincial government of Iloilo estimated the losses due to the blackout at P3.8 billion.—LDF, GMA Integrated News