Thank you for your presence. We are here to address the prolonged power interruption that affected Panay Island and initially parts of Negros Occidental, for the second time in less than a year.

It is most lamentable that this island-wide blackout was preventable. The Independent Electricity Market Operator of the Philippines (IEMOP) has pointed out that there was a two-hour window when the National Grid Corporation of the Philippines (NGCP) could have proactively called on the distribution utilities and electric cooperatives in Panay to reduce their load in order to prevent a sub-system- wide collapse. From the time that a generator had an unscheduled breakdown past noon of January 2, NGCP did not do anything as the systems operator responsible for maintaining the stability and integrity of the transmission grid. The loss of supply covering more than 15% of the power generated from Panay Island should have alerted NGCP to call for manual load reduction. The previous incident in April 2023 should have served as a lesson to take extraordinary precautions due to the fragility of the grid.

As I have stressed from the start of the Administration of President Ferdinand Marcos Jr., we are committed without let-up to assist and facilitate the completion of long-delayed and new transmission projects for the benefit of our people. At the same time, we will exert all efforts to exact full accountability for any failures in the delivery of the services expected from NGCP as the transmission concessionaire and the country’s biggest monopoly.

Accordingly, we will continue to work with NGCP to ensure the completion of: (a) the Panay-Negros-Cebu backbone project whose completion has been moved 6 times to March 2024 from the original target date of December 2020; (b) the Mindanao- Visayas Interconnection Project whose completion has been moved to 25 January 2024 eight (8) times from the original December 2020 date; and (c) all other projects including the Hermosa-San Jose transmission line in Luzon originally for completion in May 2018.

We will give full support to the ERC in completing the reset of NGCP’s rates, ensuring NGCP’s compliance with its legal obligations and resisting any attempt to delay or obstruct the implementation of regulatory measures.

We fully support and welcome the call made by legislative leaders and Panay local officials for a legislative investigation into this latest incident with a view to revisit and review the franchise of NGCP to ensure the timely expansion of the transmission system in line with the development needs of our people and for its effective and efficient operation. We will recommend to Congress that the review include: (a) the

separation and transfer of the systems operation function from NGCP which shall focus on the transmission network provider function: (b) authorizing the ERC to impose administrative penalties on the transmission concessionaire of P2M per day of violation or non-compliance with regulatory rules, or 1% of the cost of the delayed project based on the ERC-approved project cost, whichever is higher; and (c) review the special tax privilege of NGCP to pay only a 3% franchise tax in lieu of all other national and local taxes.

With ERC, we will get to the root cause of the tripping of the 6 power plants, and conduct a technical analysis of the Panay grid in order that necessary grid enhancements are carried out. The DOE will review the scheduled plant maintenance shutdown of all plants to widen the margin for regulation and contingency. To fully carry these out, we reiterate the instructions given by the President after the April 2023 incident for NGCP to be transparent to all stakeholders, local government units, distribution utilities, power generators and to the DOE and the ERC.

We wish to assure the public that the Government will consider and take all other steps necessary to ensure that the problems encountered are avoided in Panay and elsewhere in the country. ###