NGCP in hot seat

NGCP in hot seat

May 23, 2023, 8:03 AM
Rose De La Cruz

Rose De La Cruz


While NGCP is being hit for alleged poor performance and Chinese investment, President Marcos is rethinking suggestions to revoke its franchise. Since the National Grid Corporation of the Philippines has, in recent months, been raising its alert systems too frequently about inadequate power supply, it is now at the center of a firing line from legislators and Marcos administration energy officials who are threatening it with franchise revocation due to poor performance.

NGCP insists that it has been compliant with its mandate to ensure that the country’s transmission assets are in optimal condition to convey safe, quality and reliable electricity.

In a statement, the NGCP said it “is fully cognizant that (its) franchise is a privilege granted to it by government. We remain ready to answer any and all questions raised concerning how we do business. We are confident that the improvements we have introduced and the P300 billion we have invested to strengthen the transmission system will be recognized.”

Sen. Raffy Tulfo, chair of the Committee on Energy, met with President Marcos to express his intent to probe NGCP both about its performance, ownership, and security issues.

To this, the electric transmission company says it has “faith in the legal process and would continue to comply with all lawful directives, and pursue our mandate faithfully.”

The President said the government is open to regaining control over NGCP, if needed, and examine its security aspect.

“The President agreed with the senator’s proposal to conduct a comprehensive study or hold hearings to determine the actual situation. If necessary, the government will take back control of the entity,” the PCO stated.

Energy Secretary Raphael Lotilla said he is awaiting the audit of the Energy Regulatory Commission (ERC). “The audit findings would not necessarily translate into cents and pesos but then, what is important is the findings about what needs to be improved in the transmission system that we should be able to address,” Lotilla said.

Senators have been riled by the frequent and long brownouts in several areas of the country in addition to their uneasiness over the 40 percent ownership of NGCP by the State Grid Corporation of China (SGCC), which could pose security problems for the country. With the growing tension with Beijing, legislators fear that through its state-owned firm, Beijing could hit back at the Philippines whenever their geopolitical conflicts over the West Philippine Sea take a turn for the worse.

NGCP is SGP’s (Synergy Grid and Development Philippines, an investment holding company owned by Henry “Big Boy” Sy Jr. and Robert Coyiuto Jr. with 60 percent in NGCP) sole operating asset. It holds the sole and exclusive concession and franchise to operate the country’s transmission network, linking power generators and distribution utilities to deliver electricity to power distributors and cooperatives nationwide.

In the next 13 years, NGCP said it is committed to invest approximately P440 billion across 211 projects to support the growing electricity demand in the country and make the country’s power backbone continuously reliable.

The hearing of the energy panel last Wednesday had Sen. Grace Poe criticizing why the ERC audit of NGCP which began in 2019 is taking too long, while power outages are getting more frequent in Panay Island and Occidental Mindoro. (Mindoro island is not yet connected to the Luzon grid.--Ed)

Sen. JV Ejercito even suggested that government should buy back the 40 percent share of SGCC and control it.
Ejercito and Sen. Sherwin Gatchalian said the government, particularly the Department of Energy, should closely scrutinize NGCP’s performance after an energy official disclosed last week that the delay in its completion of various projects had resulted in the power interruptions.
Gatchalian, vice chair of the Senate energy committee, warned that NGCP may lose its 50-year legislative franchise due to poor performance. He added that NGCP failed to complete the Visayas-Mindanao interconnection and the improvements of the Cebu-Panay transmission lines, which were supposed to be completed in 2019.
“The NGCP should be held accountable for its failure to maintain the transmission lines and for the delayed projects,” Gatchalian said.

NGCP partially opened the facilities linking the Visayas and Mindanao grids early this month and said that full operation could be expected in the third quarter of this year.

Gatchalian also pressed for the NGCP to “be mandated to provide a comprehensive audit of the reliability of the transmission system, grid, and relatable facilities.”
He earlier called on the energy regulators to hold the NGCP accountable should they find the private power transmission operator at fault or remiss of its duties.
Gatchalian’s resolution cited the system disturbances in the Visayas grid, which resulted in unplanned power outages for up to 12 hours in the islands of Panay, Guimaras, and Negros and the widespread brownout that hit various areas in Luzon last week due to a tripping of the Bolo-Masinloc 230 kilovolt Line 2.

Sen. Chiz Escudero warned the government to be “very careful” and “more circumspect” in reacquiring state assets that had already been privatized. “Does anyone honestly think that the government can run NGCP better than the private sector?” he asked.

Meanwhile, President Marcos said in an interview with reporters in Pagudpud, Ilocos Norte last week that he has reservations about revoking the franchise of NGCP.

Speaking to reporters, Marcos said "there has to be a good reason to withdraw" the franchise of the NGCP. He said that while the security issues are "part of the discussion," he is more concerned about "performance – if the performance is good and if they are following the contract with the government."

The President also said the same problems might still persist even if the government would take over the NGCP operation.

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