SEN. Sherwin Gatchalian on Wednesday urged the Energy Regulatory Commission (ERC) to penalize the National Grid Corp. of the Philippines (NGCP) for its failure to secure energy reserves that resulted in the recent power outages in Luzon.

"The problem is they (NGCP) are not contracting the right amount of reserves," said Gatchalian during the virtual Kapihan sa Manila Bay forum.

"Since NGCP is not contracting, [the] ERC should punish them so the next question is why is [the] ERC not punishing them? Clearly, there is a violation of the policy," added Gatchalian, who is also the chairman of the Senate Committee on Energy.

NGCP spokesman Cynthia Alabanza, however, maintained that the grid operator has fulfilled its responsibility to procure reserves or ancillary services.

"The NGCP has for the most part fully contracted our ancillary services requirement, needed to balance and stabilize grid operations as required under the Philippine Grid Code," Alabanza said in a message.

She explained that the NGCP only needs 72 megawatts of contingency reserve or about 11 percent of its reserve requirement.

"The contracts for the ancillary services are there but they're being dispatched by the Iemop (Independent Electricity Market Operator of the Philippines) as supply because in times of deficiency like now, supply for consumption should be prioritized over reserve," Alabanza said.

The ERC assured Gatchalian that it has enforced existing rules to all regulated entities, including the NGCP.

"On the issue of NGCP ancillary contracting, there are existing rules on this and some of them are undergoing review for purposes of making the required revisions," ERC Chairman and Chief Executive Officer Agnes Devanadera said in a statement.

Between May 31 and June 2, the NGCP raised red and yellow alerts as Luzon suffered rotating brownouts due to thin power supply.

The Energy department said the rotating brownouts were due to "forced or unplanned outages of power plants and the lack of ancillary services owned or operated by the private sector."

Ancillary services ensure the transmission of capacity and energy from resources to loads while maintaining reliable operation of the transmission system as defined by Republic Act 9136, or the "Electric Power Industry Reform Act of 2001."

The Manila Electric Co., the country's largest power distributor, assured its customers of sufficient power supply within its franchise area.

Pampanga Second District Rep. Juan Miguel "Mikey" Arroyo said revoking the congressional franchises of power companies responsible for last week's rotating brownouts is not the most viable option to resolve the country's power supply situation but "Congress can always revisit any franchise given if there are violations."

Energy Secretary Alfonso Cusi earlier said an investigation was underway to determine if economic sabotage caused the power outages.

A public hearing on the issue was scheduled today, Thursday.