Here in Albay, she must still regularly log in at 6 p.m. for an online review, all while dealing with the constant power interruptions in the province.

“We experience almost-daily brownouts,” she told CoverStory.ph. “Sometimes, the electricity would flicker, and other times there are scheduled power interruptions for 8-12 hours.”

She said it’s unfair that electricity bills are rising but service is poor.

Amano and her household are among some 217,000 member-consumers of Albay Electric Cooperative Inc. (Aleco), the distribution utility (DU) powering all 15 towns and three cities in the province.

After the Sept. 27-28 investment summit in Legazpi City, Albay has secured P84 billion in pledges from private companies here and abroad for a shift to 100% renewable energy. When all of its planned solar and wind farms in its first and third districts are built, it will be able to generate 1,250 megawatts of electricity.

Albay Gov. Edcel Greco “Grex” Lagman sees these pledges as positive for the province’s 2050 targets.

“It’s a very impressive pledge,” he told CoverStory.ph. “It only goes to show that they believe in our advocacy that Albay should be completely renewable by 2050. It’s a great start. As a local government unit, Albay is committed to making sure that an environment conducive to investors will be had.”

In October 2023, Albay was the first to declare a state of climate emergency when the Philippine Movement for Climate Justice (PMCJ) visited the province during the Climate Walk 2023.

PMCJ organized the well-attended 2-day summit in Legazpi City alongside the provincial government of Albay. Among those present were Lloyd Cameron, economic and climate counsellor of the Embassy of the United Kingdom; Marissa Cerezo, director of the Renewable Energy Management Bureau of the Department of Energy; Yang Guoliang, minister counsellor of the Embassy of the People’s Republic of China; and Rene Ofreneo, president of the Freedom from Debt Coalition.

‘Christmas lights’

Lagman said that in popularizing renewable energy (RE), “we have to involve the communities to make them understand that the perennial problem in electricity—which seems like a Christmas-lights setup—will now be changing for the better.”

The governor was referring to the common description of the electricity supply as “Christmas lights” or flickering on and off.

Aleco spokesperson Anj Galero said the constant power interruptions in Albay are due to various reasons: “overloading of settings in substations, hot spot corrections, cut-off of primary and secondary lines and so on.”

She told CoverStory.ph that “our technical team is focused on eradicating these problems.”

Galero mentioned illegal connections as also contributing to the power interruptions. “That is why the cooperative is doing its best to strengthen its campaign against electricity theft and pilferage,” she said.

Lagman said that once RE is produced in the solar and wind farms planned in the province, Aleco can be “pressured” into buying clean energy.

“We should also pressure Aleco as DU … to buy from RE suppliers, not from dirty energy like coal-power plants,” he told the press on Sept. 28.

Galero denied rumors that the National Electrification Administration (NEA) had pressured DUs not to attend the summit. “As far as Aleco is concerned, there was no express prohibition on attending the summit,” she said.

“Aleco is not against renewable energy usage. We express our full support for it. Also, the cooperative abides by the rules and guidelines governing the establishment of the Renewable Portfolio Standards for on-grid areas which is mandated by law.”

Lagman praised Aleco for attending the summit despite “mention that there was pressure from NEA.”

He added: “In the national level, there’s push and pull. Of course, they want the status quo. They want traditional sources of energy to prevail. But that cannot happen. There is no way to go but RE. There is no way to go but green.”

Signal

Lidy Nacpil, regional coordinator of the Asian People’s Movement on Debt and Development (APMDD) and convenor of Asia Energy Network, said they view the investment summit in Legazpi City as historic and a critical point in the shift to RE for Albay and the rest of the country.

“We hope that it sets off a signal and becomes a source of inspiration for other local government units, provinces, cities, towns,” Nacpil told CoverStory.ph.

She said that the Philippines will benefit from local governments being empowered to pursue such projects, and that “we don’t have to be bogged down by the slowness of action by the national government.”

Nacpil said it is unfortunate that one of the problematic features of Epira, or the Electric Power Industry Reform Act of 2001, is that the national government is not allowed to make significant investments in the power sector.

“The government needs to lead the transition from fossils to renewable energy, and if their hands are tied from making investments, then they will not be able to exercise the leadership that is needed,” she said. “In the meantime, while we are addressing these burdens at the national level, we should be pursuing the acceleration by mobilizing the local government. That is why [the summit] is very historic.”

Climate crisis solution

Most of the people of Albay view the shift to RE as a short-term solution to the constant power interruptions. But for the APMDD, a member of the PMCJ, the greatest reason for this shift is “at the heart of the solution to the climate crisis.”

International activists and advocates have called for keeping the world’s average temperature at 1.5 degrees Celsius as a defense line against the extreme and irreversible effects of the climate crisis.

“If we are to keep this goal still possible, what is important is not just to talk about what we must achieve by 2050. What is important is what we need to achieve in the ‘immediate’ and the ‘near’ term,” Nacpil said in a presentation during the first day of the summit.

Albay, like many eastern provinces in the Philippines, usually bears the brunt of typhoons entering the country.

In 2023, some 95,000 persons in Albay alone were affected by Tropical Depression “Amang,” according to the National Disaster Risk Reduction and Management Council (NDRRMC).

Amang eventually weakened after passing another Bicol province, Camarines Norte, but it left P12 million in damage in agriculture, affecting more than 1,300 farmers and fishers.

This year, Typhoon “Enteng” (international name: Yagi) affected some 94,000 Albayanos and left close to P2 billion in damage to agriculture and affected over 45,000 farmers and fishers, according to the NDRRMC.

Crizel Amano said her closest encounter with stronger typhoons was in 2020, when Supertyphoon “Rolly” (international name: Goni) ravaged the Bicol region.

In Albay, more than 474,000 residents were affected and in her home village of San Francisco, residents were killed or went missing after lahar triggered by Rolly buried homes.

Nacpil also said the shift to RE must be rapid, equitable, and just, and that the scale and pace of the shift must ensure that net zero emissions are reached by 2050.

She said efforts to reduce emissions must be shared by all countries, and especially by countries with historically high emissions such as the United States, which emitted 509 gigatons out of 2,500 between the years 1850 and 2021, or 20% of total emissions despite it being home to only 4.23% of the world’s population.

This is comparable to the share of China and India (34.6% of the world’s population) of 14.6% of emissions.

Finally, Nacpil said, governments must address potential dislocations and disruptions in people’s lives and ensure that all sectors of society are involved in the shift.

No dislocation

Arnold Onrubia, officer in charge of Albay’s Provincial Planning and Development Office, said the province is making sure that funds are allotted for possible displacements when wind and solar farms are installed.

Said Governor Lagman: “We don’t want to use land from which people will be displaced, so we’re looking at private landholdings. That will be the best option for us at this point.”

He also said people living near potential RE farms will be employed, noting that “the job creation potential is very huge.”

In terms of transparency and accountability, the governor said an ordinance is forthcoming: “We need the support of our board members. We need them to be on board and that will, of course, provide the transparency that the people of Albay deserve. We cannot do this with an executive order. It should be via an ordinance or a local law.”

PMCJ energy officer Edwin Tesaluna said in a presentation at the summit that Albay has the potential capacity to automatically transform to 100%renewables, which, he noted, Albayanos know because of its geothermal plants.

“Unfortunately, because of some regulatory requirements, procedures, policies, etc., Albayanos did not avail [themselves] of clean and renewable energy,” he said. “Instead, the main source of the power of Albay was taken kilometers away in Batangas, at a coal-fired power plant.”

Local governments can

Asked if she and her colleagues see public and private partnerships as the only way to go, Nacpil said local governments must be ready to make public investments.

“If the local government can, and they should be able to raise enough resources, they can actually have their own [RE] projects that can be pacesetters,” she said.

Nacpil said projects intended to service communities, and not to raise money, should be led by the government: “The private sector will not be as interested to do that. Their bottom line will always be, ‘Will we earn?’ That’s the economics of it. And because energy isn’t being given for free, of course, there will be some returns on their investments.”

Moreover, she said, local governments will be facing adversarial power and influence from fossil fuel companies.

“For instance, we have encountered in a number of areas in the Philippines some mayors who are not very cooperative because they have some economic interest in the development of fossil fuel projects in their city,” she said.

Alberto David, a member of the Aleco Resistance Movement International (Armi), said that if RE were really meant to help Albayanos, the government should have made use of local resources such as Tiwi Geothermal Power Plant (TGP) and the Bacon-Manito Geothermal (BacMan), both in Albay.

Armi has been calling for lowering electricity costs and stopping support to electricity from fossil fuels.

“We currently have oversupply from TGP and BacMan,” David told Coverstory.ph. “The ‘profits already taken by the oligarchs and bureaucrats for decades could have already freed more money for solar, wind, hydro and other resources. With Albay and Bicol’s natural RE resources, we should have already been the RE superpower being dreamt of.”

David described the RE investment summit as a mere election move: “As usual, because it is the periodic election zarzuela period, politicians promise heaven, earth, the moon and the stars to get people to vote for these same oligarchs and bureaucrats. Owner-member-consumers will pay these monopolies while being made to clap their hands, smile and laugh in glee even as the plunder and resulting underdevelopment intensify.”

The post Albay aims for 100% renewable energy in 2050 appeared first on CoverStory.

In its preliminary review, the Energy Regulatory Commission (ERC) disallowed the expenses of National Grid Corporation of the Philippines (NGCP) amounting to P3.7 billion, which it said were “improperly documented or not recoverable for customers.”

The biggest items disallowed were for public relations, corporate social responsibility (CSR), and advertising expenses. 

NGCP’s advertising expenses, for example, reached P130 billion from 2016 to 2020. It argued that these expenses were “not for marketing purposes” but for “information dissemination.” 

The ERC, however, demanded proof of the need to spend such an amount on ads. 

“There is a test of reasonableness [in assessing these expense items]. If these were spent on full-page ads saying ‘Bawal humawak ng livewire,’ [we must ask]: reasonable ba ‘yung full-page ad saying that?” ERC Chair Monalisa Dimalanta said in a news conference last November, in which she announced the results of the commission’s preliminary review. 

In a news conference held right after the ERC’s own, NGCP Assistant Vice President Cynthia Alabanza said it was “unfair” for the regulator to “retroactively” apply new rules.

“Before you join a game, you need to know the rules. And to retroactively apply rules while you’re in a game, that’s unfair,” Alabanza said in Filipino. “I’m wondering why they released [the result] when it is still raw. It’s like if we had 100 steps to take to the finish line, we’re still in step two.” 

To let the public know

Dimalanta said in the ERC news conference that it was necessary to release the initial findings. “I think we owe it to the public to let them know what is happening [in the review] and to provide guidance on what is allowed and disallowed [in the expenses of NGCP].” 

Alfredo Non, who served as ERC commissioner from 2012 to 2018, said there should have been “clearer guidelines” on what spending items were “acceptable.” 

“As far as I am concerned, the ERC has not released guidelines on how regulated entities may spend on CSR, or salaries,” he said. 

But Non acknowledged that during his time, the ERC disallowed salary increases for a government-controlled corporation. 

“When the Philippine Electricity Market Corp. asked [earlier] for higher market fees, because that’s how they cover their budget for salary increases, we disallowed it. Because they refused to show documents of their payroll,” he said, adding: 

“So if NGCP shows documents, then they should be allowed.” 

NGCP’s reply to the ERC findings is expected to have addressed these issues.

According to the ERC, the disallowances were intended to protect consumers.

“It’s not that the commission is prohibiting [regulated entities], for example, from increasing the salaries of their employees, or giving donations, or engaging in CSR [activities],” Dimalanta said in the ERC’s November news conference. 

“What we’re saying is, you can’t recover that from the rates [you impose on consumers]. You recover that from your profits,” she said. 

The ERC had previously ruled, in cases involving power distribution utilities, that CSR expenses should not be charged to consumers.

In its 78-page order, it also highlighted that the NGCP, as a public utility, is mandated to incur only “necessary and efficient costs,” with expenses kept “at a minimum.”

To send a clear message

Adoracion Navarro, senior research fellow at the state think-tank Philippine Institute for Development Studies (PIDS) said the ERC’s moves are intended to send a clear message to NGCP and other regulated entities to practice discipline.

“If before, [the NGCP] got away with [disallowed expenses], then the regulator is now setting more discipline,” Navarro, a former deputy director general at the National Economic and Development Authority, told the PCIJ.

“The regulator is now just enforcing that we have to stick with the principles or the rules,” she said. 

A former energy official who asked not to be named said the ERC is making sure that NGCP is “not shortchanging the industry and the Filipino people.” 

The official said that the entire rate-setting process is supposed to determine which expenses are considered prudent, and that it’s up to NGCP to justify its revenue requirements.

The ERC is “wary,” the official said. “It just wants to make sure that NGCP is functioning at its optimum efficiency, and that it is not shortchanging the industry and the Filipino people.” 

“The concession agreement is a privilege, and that comes with attendant responsibilities,” the official added. 

Will there be refunds?

The ERC is expected to release its final determination of the rates in the first quarter of 2024.

Will there be cash refunds? According to the ERC, refunds are possible but not guaranteed.

“What we’re seeing are just telltale signs. Because they are claiming this much, and we are deciding that they can only recover this much, then there could be a downward adjustment [on their allowable revenue], or a refund,” Dimalanta said in November.

Instead of cash refunds, the ERC is inclined to implement a “reduction of transmission rates,” Sen. Sherwin Gatchalian said at a Senate hearing held on Nov. 13, 2023, to discuss the commission’s budget. He defended the ERC budget during last year’s budget deliberations. 

“In terms of modality, it’s easier to reduce the rates, and easier for the regulator to monitor and apply, and to supervise [that kind of] implementation,” Gatchalian said during the hearing. 

How much that reduction would be reflected in consumers’ electricity bills has yet to be determined, he said, but added that it would be “significant.” 

Non said it was the release of the partial results that “created a wrong impression that there would be refunds.”

The release of ERC’s final review of NGCP’s fourth regulatory period was initially expected as early as August 2023. Instead, a preliminary review was released three months later, in November, around the time that Congress was deliberating on the national budget. 

“It’s budget season. [The ERC] had to show to Congress that they were doing their jobs,” said the former energy official who spoke with the PCIJ. 

The Senate approved an P888-million budget for the ERC, higher than the P611 million originally proposed by the Department of Budget and Management.

Under scrutiny and criticism

NGCP faced scrutiny amid heavy criticism of its performance as the country’s grid operator.

Its NGCP officials have been called to many hearings held at the House of Representatives and the Senate since parts of Luzon were subject to rotational power outages in the summer of 2021. It does not help that the Luzon grid also suffers from yellow and red alerts every year once the hot season sets in.  

NGCP is responsible for building more transmission lines, but many of its projects are delayed. Power producers have previously lamented delays in their connections to the grid. 

President Ferdinand Marcos Jr. himself reprimanded NGCP during his second State of the Nation Address in July 2023 over these delays.

“We are conducting a performance review of our private concessionaire, NGCP. We look to NGCP to complete all of its deliverables, starting with the vital Mindanao-Visayas and the Cebu-Negros-Panay interconnections,” Marcos said in his speech.

Last month, Marcos again took a swipe at NGCP for failing to prevent a total power blackout on Panay Island that lasted three days.

“This incident emphasized the vital role of these interconnection projects. We cannot afford to have another round of this costly interruption, not only in Panay Island but anywhere in the country,” he said in an NGCP event announcing the completion of the Mindanao-Visayas interconnection.

Marcos pushed for the completion of remaining critical interconnection lines, including the Cebu-Negros-Panay backbone project during the event.

“We look forward to your assurances in the promised completion of the 230 kV Cebu-Negros-Panay backbone project by March of this year,” he said. 

The ownership structure of NGCP has also been a subject of security concern because it is 40% owned by China’s State Grid Corporation. Lawmakers have expressed fears that Beijing could use NGCP for sabotage in case of heightened conflict over the West Philippine Sea.

NGCP said this is not a concern because “only Filipinos are manning [NGCP] substations.” The remaining 60% stake is split between businessmen Henry Sy Jr. and Robert Coyiuto Jr.

Financial muscle

On the other hand, there are concerns that cutting NGCP’s profits could affect its ability to expand transmission lines. 

NGCP needs the financial muscle to develop the country’s transmission grid and prevent massive blackouts. It also needs to modernize the grid to support renewable energy suppliers, according to experts.

In a 2023 report, the think tank Climate Analytics estimated that the Philippines would need transmission lines to accommodate 163 gigawatts (GW) of energy, taking into account the variable nature of proposed and committed renewable energy projects.

NGCP’s Alabanza also said as much. She said transmission planning would be critical to the green energy push.

“So if [the ERC] limits our ability to recover our bonafide expenses, then it would have an impact,” she said.

Non warned of consequences if the ERC’s preliminary review is upheld. He said NGCP’s investors could be “forced to pull out” if the effects of the review put a dent in the company’s financial ability to operate. 

“If I were NGCP, I would fight it out [in court], because the basis for you to continue is a going concern. And if the effect of the review is too significant, then I may pull out [of the concession agreement,” he said.

Whatever the outcome, the ERC’s final review of NGCP’s rates will inevitably have consequences on the energy industry. It will also translate to real costs that Filipino consumers will bear.

The post NGCP told to ‘practice discipline’ to protect consumers appeared first on CoverStory.

The Supreme Court petition filed by National Grid Corp. of the Philippines (NGCP) to halt a long-delayed review of its rates could keep power costs high and delay potential refunds to consumers.

NGCP is a private monopoly that operates the country’s power transmission lines, or the grid linking power generators to distribution utilities such as Meralco and electric cooperatives nationwide. Costs incurred by NGCP are passed on to consumers as part of their electric bills, accounting for about 10% of the total bill based on estimates.

NGCP suffered a setback last November when the Energy Regulatory Commission (ERC), in a preliminary review of its rates from 2016 to 2022—the fourth regulatory period (RP)—cut its allowable expenditures by half. 

The amount included disallowances worth P3.7 billion, which were spent for public relations and advertising costs, among others, that the ERC said should not be charged to consumers.

Senators have been among the most vocal in calling for the ERC to order refunds to consumers.

But NGCP took the case to the Supreme Court, questioning the new rules adopted by the ERC when it reviewed the rates of the transmission operator. It sought a temporary restraining order (TRO) on the ERC proceedings. 

NGCP lawyer Jerome Versoza announced this move in December 2023, as the ERC began proceedings for the fifth RP covering the years 2023 to 2027. 

If granted, a TRO would restrain “the honorable commission from continuing further proceedings with concern to the fourth RP application and the fifth RP application,” the Versoza said.

The fourth RP (2016 to 2022) is the subject of the November preliminary review, whose final determination is expected in the first quarter of 2024. The fifth RP covers the current period from 2023 to 2027. 

‘Regulatory failure’

Pete Ilagan, a consumer affairs advocate and former energy official, warned that a Supreme Court intervention would “delay the reset process, definitely.”

“But the bigger issue is the application for the fourth regulatory process is still pending, and it’s already past the period,” Ilagan said. “[It is] a clear case of regulatory failure.” 

During the December 2023 hearing, ERC presiding officer Maria Corazon Gines took note of Versoza’s manifestation, but proceeded with the pre-trial for the fifth review as the Supreme Court had yet to act on NGCP’s plea. 

“As there is still no TRO or preliminary injunction, then we will continue with the proceedings,” Gines said.

NGCP’s counsels stayed in the room but did not comment during the two-hour proceedings.

The details of NGCP’s petition remain under wraps. News organizations including the Philippine Center for Investigative Journalism (PCIJ) have repeatedly sought a copy from NGCP, but were denied. 

The PCIJ has also requested a copy from the ERC, but was refused. The regulator argued that the PCIJ was “not a party to the said case.” 

“The ERC is enjoined to observe the sub judice rule (which restricts comments and disclosures pertaining to judicial proceedings), consequently, [we are] constrained to deny your FOI (freedom of information) request,” it wrote in a letter to the PCIJ. 

NGCP has publicly questioned the ERC’s preliminary review of its rates because the commission—hobbled by internal issues and, later, the Covid-19 pandemic—changed the rules governing the review process. 

The ERC review, called the “rate reset,” is normally forward-looking and akin to a budget process. The ERC approves NGCP’s annual revenue requirement from which it can charge its expenditures.

The original timeframe of the fourth regulatory period covered five years—from 2016 to 2020. The rate reset should have been done in 2015. But a series of leadership changes in the ERC delayed the process.

The ERC only started the review process only in December 2022. It decided to look at NGCP’s actual expenses and added two more years to the fourth review period—2016-2022 from the original 2016-2020—to clear the backlog in time for the fifth review covering 2023 to 2027.

Excessive rates

Critics have found NGCP’s transmission rates, set in 2009, “excessive.”

The ERC’s preliminary review of NGCP’s rates from 2016 to 2022 cut NGCP’s revenue requirement—essentially, the transmission operator’s allowable expenses—to more than half. 

In its application, NGCP sought a revenue requirement worth P387.80 billion for 2016 to 2020, which meant an annual average of P129 billion. But the ERC, based on its initial review, found that allowable revenue should only be at P183 billion for the period, or about P36.67 billion a year.

From 2016 to 2020, NGCP operated on an interim maximum annual revenue (iMAR), approved by the ERC under a different leadership. 

This iMAR, said NGCP assistant vice president Cynthia Alabanza, was only an estimate but was approved by the ERC as there was no regulatory review at that time. 

“Just like when Congress hasn’t approved a government budget, the government would spend based on what was previously allowed. So that’s what we were doing… we were spending based on what was allowed [in the third regulatory period],” Alabanza said in Filipino in a news conference in November 2023. 

But the iMAR could be subject to review and may be revised, based on the ERC’s rules. 

3 major items

The majority of the ERC’s cuts in the preliminary review came from three major items: net efficiency adjustment, revenue under-recoveries, and net performance incentive

These three items were worth P104 billion during the five-year review period. 

The net efficiency adjustment is the incentive given to NGCP for achieving “cost reductions in controllable costs,” while revenue under-recoveries are expense items not recovered during the previous regulatory period. 

The ERC said a decision on both items would be made in the final determination of the review due this quarter. But it is not keen on granting a net performance incentive to the transmission operator. 

This incentive is based on a performance incentive scheme (PIS), a set of service and operational performance criteria, which is supposedly set before the beginning of every regulatory period. 

If NGCP meets these criteria, it is rewarded with an incentive. Otherwise, penalties may be imposed. 

In its application for the fourth rate reset, NGCP adopted the PIS set during the third regulatory period. But the ERC said it was “constrained from upholding this position.” 

“Considering that the PIS and its factors have not been established prior to the commencement of the fourth regulatory period, it follows that NGCP does not have the basis to enforce the incentives. Conversely, there appears to be no grounds for the imposition of penalties,” the November ERC order read. 

Alfredo Non, who was ERC commissioner from 2012 to 2018, said its position was debatable because NGCP should be recognized for meeting the criteria for incentives in the previous regulatory period.

“It is not NGCP’s fault that ERC failed to provide parameters for the fourth regulatory period,” Non said. 
The ERC said the disallowances were intended to protect consumers. See sidebar on rate reset.

Read more: Smoke, mirrors, wood pellets: Vietnam clears native forest to supply ‘clean’ energy to Asia

The post Power transmission monopoly NGCP questions rate review amid calls for refund appeared first on CoverStory.

As the sole public utility in charge of power transmission lines, the National Grid Corporation of the Philippines (NGCP) is mandated to ensure the reliability of the country’s electricity supply. So when a government representative found that it had included corporate social responsibility (CSR) activities in its operating expenses, she sought an explanation.

“Are CSR expenses necessary for the provision of the transmission services by NGCP?” asked Marbeth Laconico, corporate secretary of the National Transmission Corporation (TransCo), said during a hearing called by regulators.

TransCo is the state entity that owns the power transmission grid, which brings power supply from generating plants to electricity distributors. NGCP, owned by a consortium of Filipino tycoons and the State Grid Corporation of China, won the concession deal to operate it after a public bidding in 2007.

Questions over NGCP’s finances have risen in recent years, as the transmission operator, a state-sanctioned monopoly, reported higher profitability. Last year, NGCP reported P34.7 billion in net income on nearly P62 billion in revenues. Its net profit margin grew to 56.15% from 47.6% year-on-year.

Yet based on its financial statements from 2016 to 2022, NGCP passed on to consumers P2.4 billion in expenses for “public relations and corporate social responsibility,” P46.2 million in “charitable donations,” and a donation of P942 million for a “Covid-19 Preventive Drive.”

“NGCP values not only the quality of [its] transmission service,” NGCP financial controller Raymund Fontillas told regulators.  “We also like to put [a] premium [on] engaging with communities, which I suppose all companies are undertaking as part of their corporate social responsibility projects.”

Regulators have also sought explanations for the huge amount spent by the grid operator on salaries and benefits paid to employees, as well as expenses due to force majeure events (FMEs), such as natural calamities.

Since January 2023, the Energy Regulatory Commission (ERC) has held 14 hearings to determine how much NGCP should charge customers for the period 2016-2022, the fourth round of regulatory reviews.

TransCo and distribution utilities like Meralco grilled the grid operator during the hearings, where the exchange between TransCo’s Laconico and NGCP’s Fontillas occurred.

Transmission rates are supposed to be set every five years, the length of a regulatory period. But that has not happened in the past decade. The last time NGCP had a regulatory review was in 2010. The review determined the maximum allowable revenue it could earn for 2010-2015, the company’s third regulatory period.

The ERC did not call for a formal review of the rates until it issued the Amended Rules for Setting Transmission Wheeling Rates in 2022, which officially began the fourth regulatory review.

But that does not mean NGCP has stopped collecting fees from customers. It has maintained an average net profit margin of 47.83% from 2016 to 2022. Based on its financial statements, the company earned an average of P23 billion annually during the five-year period (See Table 1).

This delay had been the subject of multiple hearings at the Senate and the House of Representatives, on top of NGCP’s own delay in the construction of its interconnection projects that add to consumers’ monthly electricity payments.

At least 9% of what Filipinos pay for electricity goes to transmission charges. This means that for every P100 spent on the electricity bill, P9 goes to NGCP.

How much that 9% costs monthly is determined by the ERC, the quasi-judicial body in charge of regulating the energy sector.

The regulatory review hearings provided a venue for NGCP to explain the expenses that had been questioned multiple times by critics.

Among the other expenses questioned during the hearings were for FMEs. For the fourth regulatory period, NGCP is applying for P1.057 billion worth of FME claims, including related costs that occurred after 2010, or before the fourth regulatory period.

Such expenses can be passed on to consumers, subject to the ERC’s approval. Natural disasters such as typhoons, earthquakes, and landslides, or man-made disasters such as war or riots, are considered FMEs.

Under the concession agreement between NGCP and TransCo, the former is mandated to insure its assets. NGCP’s financial statements show that it spent P2.8 billion in insurance payments from 2018 to 2021, including industrial all-risk insurance, a type of policy that allows the policyholder to protect assets from risks other than fire.

Almost half of insurance policies during the period, or about P1.3 billion, were procured from Prudential Guarantee and Assurance Inc, one of the country’s largest nonlife insurers. Its chair, Robert Coyiuto Jr., owns one of the shareholders of NGCP: Calaca High Power Corp.

During a hearing, Reeva Shane Viado, corporate financial analyst of the Power Sector Assets and Liabilities Management Corp. (PSALM), asked NGCP if it had claimed any amount related to FMEs from its insurance providers.

PSALM is the state entity that restructured the energy sector.

“It is just our position… that if NGCP has already recovered any amount from its insurance providers, such amount should not be included in this revenue under the recovery proposal of NGCP,” Viado said.

The NGCP representative failed to respond to the question.

“Clarificatory questions” were also posed by the ERC regarding the compensation package of NGCP employees. In August, the commission directed NGCP to provide a detailed breakdown and explanation of salaries, wages, and employee benefits from 2016 to 2020.

Salaries and employee benefits, which totaled P20.9 billion in 2016-2020, were the second biggest expense item during the review period.

According to public records, NGCP employs about 4,700 employees. That means each employee earned P4.4 million a year on average, or about P371,000 a month.

Financial statements also reveal that key management personnel enjoyed “short-term benefits” that averaged P346 million in 2016-2020. But the documents are silent on what kind of benefits were paid to these employees.

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With the delay in its regulatory review, NGCP has been billing customers based on 2010 rates. In a paper, University of the Philippines economics professor Joel Yu said the company “continues to enjoy the rates of return determined by the ERC which are no longer reflective of the opportunity cost of capital.”

As the rates were determined based on prevailing market conditions — just after a financial crisis — a premium was placed on the risk taken by NGCP in operating the country’s transmission grid. The economy has since recovered.

The ERC uses a performance-based review in determining NGCP’s wheeling rates. This means NGCP may obtain cash incentives in case it performs beyond ERC target criteria, which are supposed to be reviewed every regulatory period.

Because of delays in the review, NGCP was allowed to recover an interim maximum annual revenue from 2016 to 2020 based on criteria set in 2010. In the ongoing review, NGCP claimed that customers owed it P316 billion, or the total revenue requirement during the period.

Based on an analysis of available data by the Philippine Center for Investigative Journalism, that amount was at least 28% higher than what NGCP had charged customers during the review period.

The ERC asked NGCP during the hearings how much the revenue requirement would translate to per-kilowatt-hour rates, but the grid operator was unable to reply.

The commission has decided to catch up on the delay and extend the duration of the fourth regulatory period up to 2022, or from five years to seven years.

NGCP opposed this, citing the five-year intervals followed in previous regulatory periods. In October, the ERC denied the plea, which means the decision on the fourth regulatory review may be published soon.

How the ERC decides on which expenses NGCP can pass on to consumers will result in either refunds or higher electricity bills in the coming years.

Read more: Environmental concerns stall wind farm expansion in Panay natural park

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SunAsia Energy Inc. and its partner and investor Blueleaf Macquarie Capital have been recognized as the first beneficiary of President Ferdinand Marcos Jr.’s Executive Order No.18 “constituting green lanes for strategic investments.” 

At the ceremonial launch of the green lanes attended by the President and held at Sofitel Philippine Plaza Manila last July 13, the 1.3-gigawatt floating solar project in Laguna Lake developed by SunAsia and Blueleaf was cited as a project of national significance owing to its importance, investment size, and capacity to achieve energy security and de-carbonization targets.

The project, composed of 10 floating solar projects, is seen as the largest such enterprise in the world.  

Under EO18, all national agencies and local government units are directed to act swiftly on permit applications filed by investors doing projects of national significance. The green-lane privilege removes the challenges normally encountered by foreign investors during the permitting process and is aimed at accelerating the development and construction of significant projects. 

Related : Contract awarded for world’s largest floating solar project

SunAsia and Blueleaf first introduced the floating solar project during Mr. Marcos’ state visit to Singapore last year. The investment commitment amounting to $1.2 billion is projected to flow in-country between 2025 and 2030. 

A pioneer developer of clean and renewable solar energy in the Philippines, SunAsia applied the floating solar project as a strategic investment in order to avail itself of green-lane services for permitting and licensing processes. 

The flagship project was granted a certificate of national significance in April. This month it received a notice of award from the Laguna Lake Development Authority for lake lease rights and solar energy operating contracts from the Department of Energy.

SunAsia president Tetchi Capellan said in a press statement that EO 18 represents the government’s determination to attract and deploy huge investments that are strategic in nature. 

Through the green lanes, she said, the permitting process among government agencies would be expedited and streamlined, thereby allowing significant projects like the floating solar project in Laguna Lake to be quickly constructed.

Blueleaf CEO Raghuram Natarajan said the green-lane privilege granted the floating solar project “emphasizes the strong commitment and a step in the right direction to mobilize significant capital into green energy projects.” 

“This acceleration will play a crucial role in achieving the Philippines’ ambitious de-carbonization goal of 35% share of renewable power generation by 2030 and 50% by 2040,” Natarajan said, adding: 

“We appreciate the strong support and endorsement by the Department of Trade and Industry, Board of Investments, and Department of Energy of the Philippines, and look forward to be working with the public and private sectors to ensure that the project activities are conducted in a manner that will create significant social and economic benefits to the community.”

Blueleaf is a leading Pan-Asian renewable energy platform that develops, finances, owns and operates renewables and storage assets to accelerate the energy transition towards net zero and beyond. 

It is committed to upholding the highest environmental, social, governance and safety standards, and serves both corporate and industrial consumers and large utilities, providing customers access to competitive and green energy as well as solutions to achieve their sustainability targets.

Blueleaf has a development pipeline of solar, wind and storage projects in excess of 7 GW. It is a portfolio company of Macquarie’s Green Investment Group. 

SunAsia is a pioneer renewable energy developer in the Philippines harnessing solar power to provide environmental and business solutions. Founded in 2013 by innovative entrepreneurs from real estate and agriculture, it continues to deliver megawatts of clean electricity in support of the Philippines’ energy security goals, and to contribute to global efforts to transition toward a net- zero carbon emission future.

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The project has a cumulative capacity of over 750 megawatts (MW). 

The move is viewed as a milestone in the Philippine energy sector, with the Department of Energy (DoE) issuing the first set of solar energy operating contracts (SEOCs) for a total 1.3 gigawatts (GW) in floating solar projects.

In September 2022 during President Ferdinand Marcos Jr.’s state visit to Singapore, Blueleaf Energy signed a letter declaring its intention to significantly increase its commitment for sustainable infrastructure investments in the Philippines. 

The firm is a stand-alone portfolio company of Macquarie’s Green Investment Group. In partnership with SunAsia Energy, it has been developing the large-scale floating solar facility on Laguna Lake, spanning the cities of Calamba, Sta. Rosa and Cabuyao, and the towns of Bay and Victoria in Laguna.

During the contract awarding ceremony at the DoE office in Makati City, Energy Secretary Raphael Lotilla reiterated his promise to strengthen the renewable energy (RE) sector and declared the DoE’s support for commercialized floating solar facilities as an emerging technology. 

Australian Ambassador HK Yu PSM and Singaporean Ambassador Gerard Ho Wei Hong were among those present at the event, which reflected the need to meet the Philippines’ decarbonization targets by 2040. 

Great potential 

Blueleaf Energy CEO Raghuram Natarajan said: “As an active investor in sustainable infrastructure in the Asia Pacific region, we believe the Philippines holds great potential to add significant RE capacity to its energy mix and at the same time deliver green energy at an affordable cost compared to fossil fuels.”

He said the proposed lifting of restrictions on foreign ownership would be “an important step in attracting the much-needed foreign direct investments in the Philippine RE sector, to accelerate the energy transition for meeting the country’s decarbonization and net zero targets.”

Natarajan said that after the signing of the SEOCs, Blueleaf Energy would push for cooperation among public and private stakeholders to ensure the success of the project. 

This will “not only contribute to the country’s RE goals, but also spark green job growth locally” and “bring about notable benefits to the local community,” he said.

Tetchi Capellan, president and CEO of SunAsia Energy, observed that “land use is becoming a big issue for renewables.”

“People are worrying about competing uses of land, and in some markets, you might struggle to find land,” Capellan said, adding:

“There is a strong incentive to build on water as the Philippines gears up for ambitious 46 GW solar energy installations in 2040 and, at the same time, increase power supply in the country.” 

Solar-on-water

Since 2019, SunAsia Energy has been operating a testbed on Laguna Lake to study wave behavior, wind movements, solar intensity, and temperature variables in the locality. 

Like land-based systems, floating solar panels generate electricity from the sun’s rays. But the bodies of water that these farms rest on also help cool the panels, allowing them to be more efficient than terrestrial solar, according to the Environmental and Energy Study Institute. 

Solar-on-water is seen to boost clean power. Massive solar farms can now be found on bodies of water in South Korea, Japan, China, Thailand, Singapore, and Portugal. 

Developing solar-on-water projects in the Philippines’ largest lake will help achieve the government’s ambitious decarbonization target as well as the power to run industries, light homes, and energize cities.

More importantly, it will be a legacy of the Philippines to the global renewable energy space, SunAsia Energy said.

In the last two decades, Blueleaf Energy has developed and built almost 2 GW of solar capacity worldwide, including 250 MW in the Philippines. It currently has over 7 GW of solar, wind and storage projects in the pipeline across the Asia-Pacific.

SunAsia Energy, a developer of sustainable solar energy in the country, has since its inception in 2013 partnered with various entities to develop solar projects including the 60 MWp Toledo solar project in Cebu and the 20 MWp Dagupan solar project in Pangasinan.

Leading RE platform

Blueleaf Energy is a leading Pan Asian RE platform that develops, finances, owns and operates renewables and storage assets to accelerate the energy transition towards net zero and beyond. 

It is committed to uphold the highest environmental, social, governance and safety standards, and serves both corporate and industrial consumers and large utilities, providing customers access to competitive and green energy mix and solutions to achieve their sustainability targets.

SunAsia Energy Inc. is a pioneer RE developer in the Philippines. 

Founded by innovative entrepreneurs from real estate and agriculture, it continues to deliver megawatts of clean electricity in support of the country’s energy security goals and to contribute to global efforts to transition toward a net-zero carbon emission future.

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President Marcos Jr. is all for the idea of reviving the Bataan Nuclear Power Plant (BNPP), but the Department of Energy (DoE) is leaving no stone unturned to ensure the safety, if at all possible, of the controversial facility that has been lying dormant for nearly 40 years. 

Weeks after Mr. Marcos met with South Korean President Yoon Suk-yeol to discuss cooperation on reviving the 620-megawatt nuclear power plant, the DoE announced a plan to hire a third-party evaluator in 2023 to assess its viability. “We have to make sure that it’s safe, secure and still functional,” Energy Undersecretary Sharon Garin told CoverStory.ph via Zoom.  

Despite the numerous studies done on the BNPP by various companies and experts, the DoE wants “a more objective assessment” by an independent party, Garin said. The assessment will cover everything, from construction to quality control and from waste disposal to emergency response in case of a disaster—a costly procedure, according to her.  

“The sentiment is that it is there, sayang naman (a pity if it goes to waste). But we don’t want to risk the safety of the people,” Garin said. “If it’s deemed feasible, then we’ll do the project. If not, then it’s not the end of it. We have other sites that we can explore.” 

‘Like forum-shopping’ 

The DoE plan does not sit well with a long-time nuclear energy advocate, Pangasinan Rep. Mark Cojuangco, who called it a “deliberate slow-walking” tactic.  

“We’ve been debating this for 37 years,” Cojuangco said in an interview. “Now they want a new study? This is like forum-shopping. If they don’t get the result that nuclear is bad for us, they won’t accept it.”  

Commissioning the 38-year-old corruption-mired BNPP won’t be a walk in the park. The assessment alone may take years. 

If its offer to rehabilitate the plant gets the government greenlight, Korea Hydro Nuclear Power Co. (KHNP)—or any other company—will have to apply for a license to build and operate the facility from the Philippine Nuclear Research Institute (PNRI). 

The company will have to hurdle “all regulatory and permitting processes” to secure a safety assessment report from the PNRI, the government agency mandated to undertake research and development on the use of nuclear technology, and regulate it.  

“It will have to pass PNRI regulations on safety and security safeguards,” PNRI Director Carlo Arcilla said. “It’s not a free pass. If it fails, it fails.’’  

Besides, any nuclear program will have to comply with the guidelines of the International Atomic Energy Agency (IAEA), Arcilla told CoverStory.ph. “If a country goes nuclear, they will have to do a checklist according to the [global agency’s] best practices.’’ 

Survey necessary

The other order of business is to survey the residents living in the vicinity of the Bataan plant, in keeping with IAEA standards, said Garin, who also chairs the National Energy Program Inter-Agency Committee tasked with developing nuclear energy plans.  

This survey on public acceptance can be done simultaneously with the assessment, she said.

A 2019 DoE-commissioned survey showed that 79 percent of the respondents approved of the BNPP revival. But Bataan Rep. Albert Garcia, apart from certain geologists, has repeatedly warned of the risks of such a move.  

Eventually the DoE plans to do a similar survey in certain provinces where the government can build and operate 10 conventional and 10 modular nuclear power plants in the future.  

“Before you start a project, it has to have public acceptance. If public acceptance is still not that convincing, then maybe we need to talk more with the stakeholders,’’ Garin said. 

The BNPP remains viable, according to Arcilla, and proof of that is the Korean company’s offer to get it restarted in five years. He believes that it is the fastest way for the Philippines to go nuclear. 

“If it’s not [viable], why will a Korean company which constructs nuclear plants make that offer? Ultimately, if it fails, then their investment fails, right?” he said.  

After years of crossing swords with fellow geologists and academicians over safety concerns, Arcilla has not budged from his stance that the BNPP is safe to operate and entails no carbon dioxide emission.  

He said South Korea had been operating an exact model of the BNPP in its own backyard as well as in Slovenia and Brazil for the last 40 years. “Those three plants are still running very well, very safe and very profitable,” he said. “So when they make an offer to rehabilitate the BNPP, they have credibility because they have a working model.” 

‘3 times stronger’

A rerun of the 2011 disaster in Fukushima, Japan, where a powerful earthquake and a tsunami sparked multiple meltdowns at the Fukushima Daiichi plant, should not be a cause for worry either, Arcilla said.  

According to him, the BNPP has a higher seismic rating than the Fukushima plant and, hence, can withstand a powerful earthquake.

“The BNPP is three times stronger than the Fukushima plant. Magnitude 9 happens in Japan, which has never happened in the Philippines. Why? The earthquake is proportional to the contiguous length of the faults. The Philippine faults break, but in Japan, they’re continuous. That’s why they have powerful quakes,” Arcilla said. 

And since the plant is built at a higher elevation on the Philippines’ western coast, it’s safe from any tsunami that could trigger an explosion, as had happened at the Fukushima plant, he said.  

What about the disposal of radioactive materials that can last for 10,000 years?

Arcilla said the wastes could be buried in 3-kilometer-deep bore holes or mine depositories that should be sealed with bentonite clay to prevent uranium leak. He then made an astounding suggestion: “Why not put these on Pag-asa Island so it won’t be claimed by the Chinese?”—a reference to the largest island occupied by Philippine troops in the disputed Spratlys and home to a hundred Filipino civilians.

As the Philippines looks for alternative energy resources amid the global shortage of fuel, Arcilla believes that nuclear energy can eventually backstop coal, which in 2021 accounted for 58% of power generation, as well as renewable energy which contributed 22%, natural gas 18%, and oil 2%.  

The country imports more than 90 percent of its coal supply from Indonesia as well as oil. Its main gas field, Malampaya, is being depleted. 

Early this year, the Philippines sent its diplomats to plead with Indonesia after it threatened to cut the coal supply to Manila a few months into Russia’s invasion of Ukraine, according to Arcilla.  

“Why can’t nuclear replace coal eventually and then maybe, Malampaya gas?” he said, projecting that the eventual operation of more nuclear power plants would reduce the high cost of electricity. “If you spend 10 percent of your monthly pay for electricity, that is f-cking oppressive.”

‘Unsafe’ option

But Gerry Arances, convenor of the Power for People Coalition, insisted that going nuclear was an “unsafe” option for Filipinos and not the solution to the energy crisis. 

Arances said the DoE would do well to instead launch more programs improving the grid “for the integration of existing yet unmaximized renewable energy capacities,” deploy small-scale renewables, and address storage needs. 

“We would rather see the DoE coming out with its long overdue 100-percent renewable energy transition plan instead of spilling millions of pesos more of taxpayer money on developing nuclear energy, which is unsafe and incapable of urgently addressing the energy crisis, manifested by the soaring prices of electricity,” he said.

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President Ferdinand Marcos Jr. appears intent on getting the mothballed Bataan Nuclear Power Plant (BNPP) going before he steps down in June 2028, in what critics say could be yet another project to airbrush his father’s legacy.     

The nuclear power plant in the province of Bataan west of Manila was built in 1984 amid issues of overprice and corruption during the regime of President Ferdinand Marcos Sr., and has been idle for nearly 40 years. But a Korean company could get it operational in five years, if the price is right and political opposition doesn’t get in the way. 

“The biggest potential for PNPP 1 (Philippine Nuclear Power Plant) is to open the door for a nuclear Philippines,” Pangasinan Rep. Mark Cojuangco, a longtime advocate of nuclear energy, told CoverStory.ph in an interview during the holidays.

“It’s a social license acceptance,” he added, letting the cat out of the bag on why the facility had to be restarted during the President’s six-year term.  

Cojuangco believes that once the $2.3-billion, 620-megawatt PNPP 1—the official name preferred by the lawmaker to BNPP, a term that, he claimed, was coined by anti-Marcos groups—kicks into gear, other nuclear power plants will follow. 

“The site is good for three more plants, each with a capacity of 1,000 MW,’’ he said. 

Hefty price tag

Korea Hydro and Nuclear Power Co. (KHNP) has offered to rehabilitate the facility under a build, operate and transfer (BOT) scheme. It’s the same company that did pre-feasibility studies on commissioning the plant in 2008 and 2017; it is operating an identical plant in South Korea. 

But there’s a catch: KHNP executives have “verbally” sought a hefty rehabilitation price tag—much higher than their offer of $1.17 billion in 2017 and $1 billion in 2009—supposedly to cover the additional costs of upgrades to avert a “Fukushima incident,” according to Cojuangco, who met with them in South Korea early in December. 

In 2011, a powerful earthquake and an ensuing tsunami triggered multiple meltdowns at the Fukushima Daiichi plant in northern Japan.  

“I won’t mention the amount,” Cojuangco said. “But I told them that politically, that is unacceptable because they already gave word on $1 billion and then $1.17 billion. And the $1.17 billion took into account items that would address the Fukushima issue.”  

“They were insisting that there were additional items, but again, I told them these were minor in terms of the totality,” he said. “But if there was going to be an increase, it should be comparable to the jump from 2009 to 2017; that’s reasonable. We won’t agree to something unreasonable.” 

The price tag, Cojuangco recalled telling the executives, should be “publicly defensible” lest it come under criticism. 

He said he had requested the executives to put everything in writing—from justifying the jump in the rehab cost to spelling out the terms of the BOT scheme and pegging the power rate per kilowatt-hour—which he would then submit to the President.

“If it’s too expensive, what for?” Cojuangco said. 

He said he had engaged KHNP and its officials not as a government representative, but as part of his role as a lawmaker who chairs the House of Representatives’ committee on nuclear energy. He said he saw no conflict of interest in doing so.

Government property

But according to Energy Undersecretary Sharon Garin, the national government owns the BNPP and will eventually have to step in to negotiate the terms of the offer from the Korean company, or any other company, for that matter.

“When you talk about [the BNPP], it’s a national government property. For any transaction involving it, that will involve the national government. Thankfully, Congressman Mark is proactive in this sense. But you have to be cautious that this is a government property,” she told CoverStory.ph.

Cojuangco said it was the closest to a “best deal” yet, but the government should be able to complete the paperwork by December 2023, in keeping with the Korean firm’s timeline. Otherwise, he said, the plant’s operation would happen beyond the Marcos Jr. administration.  

Before the end of 2023, the Philippine government must have already signed an intergovernment agreement on the use of nuclear energy and a memorandum of understanding with South Korea to clear the way for the rehabilitation.  

“It’s the best not because of the financial [terms] but because of their expertise. They are running the identical plant to our plant,” Cojuangco said, referring to Kori 2 nuclear power plant in Busan, South Korea. 

In his view, the ideal period for the Korean company to operate the BNPP is 80 years. 

“If we want the lowest price for our people, it should be the longest term possible, and at the lowest interest rate,” Cojuangco said. “That’s why they have to tell us the per kilowatt hour price. It has to be low for nuclear to be attractive. If you really want nuclear to be attractive, the No. 1 criterion is the price. Make it low when you offer. It’s an offer that the Filipinos can’t refuse.” 

The Philippines is also looking into possible deals with France and China, the Philippine Nuclear Research Institute (PNRI) earlier said.

‘Don’t push for it’

A confluence of events in 2022—Russia’s invasion of Ukraine that triggered global fuel shortages, rising prices and a push to tap nuclear energy, an executive order issued by then President Rodrigo Duterte to include atomic energy in the Philippines’ energy mix, and the election of a president intent on pursuing his father’s nuclear ambitions—could work in the proponents’ favor. 

But an expertly thrown monkey wrench could upset all plans. 

Cojuangco said that on the eve of his Dec. 3 departure for South Korea, he was invited by former President and now Senior Deputy Speaker Gloria Macapagal Arroyo to a dinner at her home in La Vista, Quezon City. 

“Point-blank she told me, ‘We’re going to oppose you on BNPP. Don’t push for it’,” he said. “I told her, Madam President, even if you succeed at having me removed from the committee, I won’t stop this, even if I’m no longer a congressman. This is fit for the Philippines.”

It was the second time Arroyo, a member of Cojuangco’s committee, had sounded him off on her sentiments.  

Cojuangco went on with his narrative: He gestured towards Energy Secretary Raphael Lotilla, also a guest at the dinner, and told Arroyo: “Our Secretary here, how’s he going to push for it if he’s a nuclear skeptic?” 

On Arroyo’s prodding, Lotilla denied the lawmaker’s claim. Arroyo then turned to Cojuangco and said: “You see, he’s not a nuclear skeptic.” Chuckles from the other guests were heard. 

Cojuangco said he proceeded to argue that had the BNPP been commissioned in 1986, the country would have averted the power crisis it was experiencing now.  “Wasn’t the old man Marcos right, after all?’’ he recalled telling his host. 

Arroyo quickly retorted: “So is this all about vindicating the old man Marcos?” Cojuangco said he responded by saying that President Marcos Jr. wanted to go nuclear to help the poor cope with high power rates.

Bataan Rep. Albert Garcia has also opposed the revival of the BNPP for its attendant danger and hazards. 

But Cojuangco said: “If there are unreasonable people, he (the President) has to put his foot down.” 

‘Unseen force’

The main challenge to the revival of the BNPP “is an unseen force,” said PNRI Director Carlo Arcilla. “What will the current owners of the big power suppliers think of the nuclear impact to them?” 

But even if the plant is put in operation, the next challenge is to tweak the Electric Power Industry Reform Act of 2001 to allow the national government to produce power through the facility.  Under the law, the government is barred from generating power. 

“That’s one legal obstacle that needs to be [hurdled],” Arcilla said. 

Another option is to sell the BNPP to a local company which can then partner with the foreign investor to operate and eventually sell electricity to consumers, he added.   

Ferdinand Marcos Sr. contracted Westinghouse Electric to build the BNPP in response to the 1973 oil crisis. But issues of overprice and corruption, along with safety concerns, hounded the project. In 1986, following the dictator’s ouster and the Chernobyl disaster, President Corazon C. Aquino ordered the plant mothballed. 

In 2012, the Sandiganbayan antigraft court ordered Marcos crony Herminio Disini to return $50 million in commissions he received from Westinghouse for brokering the BNPP deal. Nine years later, the Supreme Court ordered Disini to pay the Philippine government P1.1 billion in damages for liability for exerting undue influence in the award of the deal to the US firm. The plant has been maintained at a cost of $800,000 a year. To be concluded

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