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LKI PRESS STATEMENT 2021-024
June 16, 2021
LABAN KONSYUMER CALLS OUT DOE AND NGCP TO STOP TUG OF WAR AND START CREATING SOLUTIONS TO THE PROBLEMS OF SUPPLY, RESERVES AND POWER RATES
Consumer Advocacy Group Laban Consumer Inc. (LKI) and its President Atty. Vic Dimagiba recently called out the Department of Energy (DOE) and the National Grid Corporation of the Philippines (NGCP) for creating the recent disastrous scenario of a power-deficient grid, and said “there is an emotional and unproductive game of tug of war being played by both sides on the issue of ancillary reserves. But what was alarming is that NGCP has been quoted on saying there will be price increases in Luzon, Visayas, and Mindanao and that is where we, Laban Konsyumer Inc. as consumer advocate , are calling for strict vigilance on this issue.”
It will be recalled that the National Grid Corporation of the Philippines (NGCP) in the end of May and start of June implemented rotating brownouts in certain areas of the Luzon region due to inadequate supply to meet the high demand from consumers. Because of this, government departments, lawmakers, and stakeholders began to point fingers on whose fault it was. The NGCP and the Department of Energy blamed power generation companies (Gencos), while some lawmakers said that the DOE was merely power-tripping and made Gencos scapegoats for the energy shortage in Luzon. Now DOE and NGCP are facing a tug of war battle on the topic of power supply , reserves and power rates.
LKI President Atty. Vic Dimagiba outlined what should be done immediately:
First , the Department of Energy or DOE should issue guidelines on Competitive Selection Process or CSP, like for the distribution utilities and Electric Cooperatives. The Supreme Court decision on CSP must apply to all the sectors of the power industry.
We propose that the DOE circular. Department Circular No. DC2018-02-0003, Adopting and Prescribing the Policy for the Competitive Selection Process in the Procurement by the Distribution Utilities of Power Supply Agreement could be expanded to include the transmission and generation entities including NGCP’s ancillary service contracts.
Second, that NGCP should submit the Terms of Reference or TOR of the CSP in accordance with the DOE Circular.
Third , NGCP should conduct CSP thru a third party bid and awards committee in a transparent and public proceedings.
Fourth, NGCP should seek Energy Regulatory Commssion or ERC approval , which approval should be issued within 30 days or shorter, from filing and where consumers, like Laban Konsyumer Inc. and others can intervene, and the substantial interest to safeguard should be to ensure the least cost to the consumers.
Dimagiba explained “While distribution utilities have been able to attract new generation capacity via CSP, NGCP has depended in capacity being brought in by DUs. Up to now we have no interisland reliable grid interconnection.
Relatedly, Laban Konsyumer has filed an intervention before the ERC on the petition of NGCP capital budget for the period 2021 to 2025, ERC Case No. 2021-031 RC , which has future impacts on power rates. Laban Konsyumer Inc. opposed capital budgets that are not necessary, proper or even incidental to the operation of the company . These are retrofitting and fit out of office, purchase of furnitures, equipment and tents, refleeting of vehicles , acquisition of air conditioning units , rehabilitation of guesthouses, multi purpose and mess halls, enterprise architecture , security guard houses and CCTV , among others.