Marcos blames blackout on ‘NGCP’s failure to act’

President Marcos on Friday said he was holding the National Grid Corp. of the Philippines (NGCP) accountable for the massive outage in Western Visayas this week as it failed to prevent a collapse of the power transmission system that caused hardship on the people, crippled businesses and endangered health care in the region.

In a video message, the President pointed out that “accountability lies with the NGCP,” saying that it was tasked with ensuring grid stability.

“Stability involves proactive responses to breakdowns and unexpected events, a duty that NGCP unfortunately has not fulfilled adequately,” he said.

It was the strongest official criticism of the company, coming from no less than the Chief Executive, after the cascading outage swept across the four Panay provinces of Iloilo, Capiz, Aklan and Antique, and Guimaras Island on Jan. 2.

Mr. Marcos said the NGCP had a two-hour window to prevent the system’s collapse but it failed to employ manual load dropping, “resulting in the crisis that we are facing now.”

“NGCP’s failure to act during the crucial two-hour window is a missed opportunity. As the system’s operator, NGCP must proactively engage with distribution utilities and cooperatives to manage loads and prevent such system collapses,” he said. Energy Secretary Raphael Lotilla made a similar statement earlier on Friday.

Second time

Mr. Marcos pointed out that it was the second time in less than a year that a blackout had hit Panay, citing a similar outage in April 2023.

The President said the NGCP assured him then that the Visayas grid had sufficient capacity, assuming timely completion of the Mindanao-Visayas and Panay-Negros-Cebu interconnections.

“However, we find ourselves in January 2024, far from the promised completion date of August 2023, and we are still, still hoping for the Mindanao-Visayas Interconnection by late January of 2024,” he said.

Mr. Marcos told the NGCP to acknowledge its responsibility and be transparent in identifying weaknesses in the transmission system.

He also ordered the Energy Regulatory Commission (ERC) to complete the reset of the NGCP’s rates without further delay to ensure the company’s compliance with its obligations, and “to defend in no uncertain terms against any attempt to defer, delay, or prevent the implementation of regulatory measures.”

Maharlika investment

In the wake of the outage that blacked out Panay, Speaker Martin Romualdez said the Maharlika Investment Corp. (MIC) could make a “strategic investment” in the NGCP to upgrade the country’s energy infrastructure and lower electricity rates.

The nearly four-day power failure “highlighted critical issues in our power infrastructure, impacting numerous businesses, industries and the daily lives of our citizens,” Romualdez said in a statement.

The MIC manages the Maharlika Investment Fund (MIF), the country’s first sovereign wealth fund, which was established by law in July last year.

Its board of directors met for the first time on Wednesday to discuss, among others, the MIF’s capitalization and potential projects.

The MIC could purchase shares in the NGCP, a private company that manages power transmission across the archipelago.

State Grid Corp. of China owns 40 percent of the NGCP, while tycoons Henry Sy Jr.’s Monte Oro Grid Resources Corp. and Robert Coyiuto Jr.’s Calaca High Power Corp. each own 30 percent.

The company holds a 25-year concession contract and a 50-year franchise to operate the country’s power transmission network, which was granted by Congress in 2008.

Power transmission used to be the responsibility of the state-owned National Transmission Corp. (Transco), before this was privatized and transferred to the NGCP after it won the bid to operate the national transmission network in 2007. Transco, however, still owns all the transmission assets.

Unscheduled shutdowns

Electricity supply was fully restored on Panay Island on Friday afternoon after the 135-megawatt power plant owned by Palm Concepcion Power Corp. came online.

The NGCP said the principal cause of the outage was the unscheduled shutdowns of Panay’s power plants, which began with the breakdown of the 83-megawatt Panay Energy Development Corp. Unit 1 on Tuesday afternoon.

Lotilla said at a news conference on Friday that the island-wide blackout was preventable, pointing to the two hours that the NGCP had to “proactively” call on power distributors and electric cooperatives in Panay to reduce their load to prevent a system-wide collapse.Lotilla said he was requesting Congress to consider removing the NGCP’s system operator function to allow it to focus on completing long-delayed transmission projects.

“The fact that [the NGCP] did not have any action taken shows there’s something wrong,” he said. “So why don’t we segregate the [system operator function] from them and they can focus on the construction of the transmission grid?”

Unfinished

As the system operator, the NGCP is described as the transmission grid’s “traffic manager.” It is in charge of coordinating with distributors on when they can draw power from the grid, depending on the stability of the transmission backbone.

Lotilla said they were considering transferring this function back to Transco, but such a move would be up to Congress.

Responding to Lotilla, NGCP spokesperson Cynthia Alabanza said they had “done their job,” and that separating its function as a system operator would be inefficient.

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“In our opinion, it will not be efficient to remove the systems operation [function] from NGCP because that is essential in running a transmission system,” she said.

The NGCP also functions as a transmission network provider and is obliged to improve the grid’s stability and, therefore, allow more energy sources to come in.

Lotilla pointed out, however, that the Cebu-Negros-Panay Stage 3 (CNP3) backbone project remained unfinished, adding that its timely completion could have prevented this week’s blackout.

CNP3 is also crucial to the full-capacity operation of the P52-billion Mindanao-Visayas Interconnection Project.

Alabanza admitted that the project could have mitigated the situation, but reiterated that solutions should come from all energy sectors, not just transmission.

“If we only look for a solution in one sector, then we cannot craft an effective protocol to ensure that this does not happen again,” she said.

‘Repeat offender’

Camarines Sur Rep. Luis Raymund Villafuerte Jr. said the ERC and the Department of Energy should state what “punitive and corrective actions” they were to take against “repeat offender” NGCP.

“The 19th Congress also needs to decide on whether to alter or amend the NGCP’s franchise agreement to compel it to upgrade its system and spend a sizable chunk of its earnings on interconnecting our major islands, or to revoke its franchise altogether and award it to a much better concessionaire,” he said.

The House energy committee will meet on Jan. 11 to continue its hearings on three House resolutions on the April 2023 outage in Panay and open its investigation of this week’s blackout.

House Deputy Majority Leader and Iloilo Rep. Janette Garin said residents of her province were reeling from the prolonged outage.“Many are falling sick because it’s too hot. Others are unable to run their businesses, especially those who are output-based. Fishermen are forced to sell their fish cheaply because there’s no ice,” she said in a statement on Friday.

Garin added that power generators in hospitals were “not enough to provide full electricity needs.” —WITH A REPORT FROM INQUIRER RESEARCH INQ

The President said the NGCP assured him then that the Visayas grid had sufficient capacity, assuming timely completion of the Mindanao-Visayas and Panay-Negros-Cebu interconnections. ‘However, we find ourselves in January 2024, far from the promised completion date of August 2023, and we are still, still hoping for the Mindanao-Visayas Interconnection by late January of 2024,’ Mr. Marcos said.