Preliminary findings on the Panay power mess

Last of 3 parts

THE power crisis on Panay Island last week, which took three days to completely resolve and at one point left the entire island without any electricity at all for a couple of hours, was primarily the fault of the National Grid Corp. of the Philippines (NGCP). The grid operator did not secure adequate reserve power supplies to manage normal demand at the time and certainly did not have reserves it could call upon in case of even a moderate problem, which was encountered at 12:06 p.m. on January 2 with the tripping of the Panay Energy Development Corp. (PEDC) Unit 1 due to a mechanical failure.

So, that shortcoming on the NGCP’s part was the root cause of the subsequent chain of failures. PEDC-1 dropped off the grid, which made the grid unstable because the NGCP did not have reserves at its disposal to control it. Then, the grid operator compounded the error by not reducing the load on the grid by implementing load-shedding or rotating blackouts. That grid instability caused six other power plants to trip simultaneously about two hours later, knocking out most of the power on Panay. The supply of power through the Negros-Panay subsea cable was interrupted about 45 minutes after that when that cable tripped for reasons that are still a bit of a mystery but may have also been caused by the unstable condition of the Panay subgrid. That major line failure caused dozens of other transmission lines to fail, leading to the island-wide blackout. Restoring the system, which is a painstaking process of resetting all the tripped lines and synchronizing restarted generation plants to the grid, then took until midday on January 5 to complete.

“It’s the NGCP’s fault for not having enough reserve capacity” is the limit of complexity that the legislative mind can handle, and so that is what lawmakers are focusing on in their made-for-television hearings on the incident. I watched a video news clip of whichever one of the Tulfos is in the Senate doing precisely that on Wednesday and providing an example of why democracy may not be the best form of government after all. That short answer ignores a number of other questions that need to be answered, and as a consequence, it can only result in an irrelevant or otherwise ineffective solution.

First of all, even though the NGCP did not, in fact, have enough reserve capacity contracted, nor the right kind of reserve capacity contracted, and its decision not to implement load-shedding at any point before or after PEDC-1 tripped was clearly bad judgment, it is important to determine the reason that was so. The “NGCP not meeting the conditions of its franchise,” or in other words, not doing its job, is not a reason. But as I said, “lawmakers” have thought processes that lie pretty close to the surface, so that’s as far as they go.

Some questions that should be asked, and almost certainly will be by the Energy Regulatory Commission’s (ERC) inquiry, are: Was there a proper day-ahead forecast to help determine reserve capacity needs? Was there any reserve capacity that the NGCP made proper arrangements for and expected to be available that was not when it was needed? And finally, as to the matter of the NGCP’s not implementing load-dropping, was there any extenuating reason for that decision? For example, was there an urgent request from a distribution utility or a local government not to be subject to a temporary blackout?

Beyond all that, it is important to remember that the NGCP was not the only actor in this drama, a point that ERC Chairman Monalisa Dimalanta has emphasized. Did the affected generation plants follow regulations and proper procedures? Was their equipment, particularly the automatic disconnection equipment, working properly? The same questions apply to the affected distribution utilities and electric cooperatives as well. While there do not appear to be obvious errors from generators or distributors, it would be unreasonable to make an assumption that there were not. Looking into it will certainly not harm.

Only after all of the above questions are answered would any sort of effective solution be possible, meaning a set of remedies that will provide reasonable assurance that the event will not happen again. Instead, what we’ve gotten so far are calls for solutions before the actual scope of the problem is understood, suggestions that, at best, have nothing to do with the situation and, in some cases, have been just plain weird.

House Speaker Ferdinand Martin Romualdez urged the newly created Maharlika Investment Corp. (MIC), manager of the newly created eponymous national investment fund, to “strategically invest in NGCP” to upgrade the national grid, even though the NGCP has repeatedly said — for example, after the last time Panay suffered a widespread power outage, which was only last April — that it has ample resources and then some for capital expenditures. All Romualdez’s statement accomplished was to confirm what many already knew, that the Maharlika Investment Fund (MIF) is a concept looking for a business case. The MIC’s newly appointed president and chief executive officer Raphael Consing Jr., to his credit, demonstrated that he, at least, has a complete understanding of the warped environment he’s agreed to work in by quickly issuing a statement saying he “fully endorsed” the speaker’s recommendation, and that the MIC would look into it. I strongly suspect that will be the last word on the subject.

Not to be outdone by his cousin in the House, President Ferdinand Marcos Jr. also sounded off on the controversy. After harshly criticizing the NGCP for falling woefully behind in completing grid interconnection projects, Marcos “ordered” the ERC to complete the long-delayed rate rebasing for the NGCP. Unlike Romualdez, the President, at least, focused on things that were actually supposed to happen, although they were no more relevant to the situation in question, given how it unfolded. For the ERC’s part, it has already been expediting the tedious rate rebasing process — delayed since 2015, thanks to the inaction of the Duterte-era ERC — as much as possible for the past several months and likely doesn’t need the reminder.

On Thursday afternoon, APEC Party-list Rep. Sergio Dagooc, who, for some reason, is a member of the House Committee on Energy, offered the truly bizarre suggestion that the Philippine Grid Code and the Electric Power Industry Reform Act of 2001 be amended “to separate the grid transmission operator and the grid system operator” to prevent a repeat of the Panay blackout. All I can say to that is kudos to Representative Dagooc for his subtle pop-culture reference because his statement immediately gave me a flashback to the late United States senator Ted Stevens’ infamous “The Internet is a series of tubes” speech. And that if the lawmaker ever has to personally handle anything electrical, like plugging in a rice cooker, I hope he has someone around to help him.

Finally, we come to the multitude of calls from legislators of both houses of Congress to revoke the NGCP’s legislative franchise. Those calls are only correct in that legislative franchises are one of the worst ideas ever enshrined in law and should not exist in the first place. As a practical matter, yanking the NGCP’s franchise would be the quickest way to ensure a return to the good old days of the 1990s, when the number of hours in a day that electricity was available to most people could be counted on one hand. It may be that the country needs a different, better grid operator — although the NGCP does, in fact, comparably reasonably well with grid operators in other places — but making that transition is something that is going to take four or five years and must be done carefully. “Lawmakers” looking to make a splash with voters would be better off confining themselves to building basketball courts, hanging Season’s Greetings banners, and letting qualified people handle the important stuff.