Jauhn Etienne Villaruel

High voltage towers that support transmission lines for electrical power distribution in the Luzon grid are seen from a residential area in Baesa, Quezon City on Tuesday, May 9 2023. Maria Tan, ABS-CBN News/File

Article (news)

ELECTRICITY-GRID

Paige Javier

ABS-CBN News

<div><img src="https://od2-image-api.abs-cbn.com/prod/editorImage/173495014750320230509-trasmission tower-QC-MT-2023-1.jpg" style="width:960px" class="fr-fic fr-dib" alt="High voltage towers that support transmission lines for electrical power distribution in the Luzon grid are seen from a residential area in Baesa, Quezon City on Tuesday, May 9, 2023. Maria Tan, ABS-CBN News/File"/>High voltage towers that support transmission lines for electrical power distribution in the Luzon grid are seen from a residential area in Baesa, Quezon City on Tuesday, May 9, 2023. Maria Tan, ABS-CBN News/File</div>MANILA — Lawmakers on Monday said they will look into the 50-year franchise granted to the National Grid Corporation of the Philippines (NGCP), including the possibility of its revocation.<div><a href="https://www.abs-cbn.com/news/business/2024/12/23/erc-imposes-p15-8-m-fines-on-ngcp-for-34-delayed-projects-1607">ERC imposes P15.8-M fines on NGCP for 34 delayed projects</a></div>The House Committee on Legislative Franchises hearing on Monday, which was meant to be a briefing on the preparedness of power utilities on La Niña, resulted in revelations of possible violations of NGCP.The panel agreed to conduct a motu propio investigation on the NGCP&#x27;s franchise, following the motion of House Deputy Speaker Quezon 2nd District Rep. David Suarez.The lawmaker initially proposed a thorough review of the NGCP&#x27;s performance.&quot;It&#x27;s high time to review the franchise of the NGCP at kung kailangan pong i-revoke ang franchise ito, let&#x27;s do it,&quot; Santa Rosa, Laguna Rep. Dan Fernandez  said.&quot;The power of oversight is within this committee. We can and must review whether NGCP is living up to the expectations set by its franchise,&quot; he added.Suarez made the motion after Energy Undersecretary Sharon Garin said of the 111 approved NGCP projects during the third regulatory period, only 83 were completed and 77 were delayed. Garin said 27 projects are unfinished and 26 are delayed, mostly due to the moving of target dates.Suarez also questioned the NGCP for supposed prioritizing billions worth of returns to shareholders, instead of infrastructure development. &quot;Shouldn’t you be allocating more for development of new sites, expanding your service rather than ensuring your shareholders get larger pie of income?&quot; he asked.&quot;Medyo nakakakulo ng dugo ang laki-laki na nga ng kinikita nila, ang laki-laki ng dibidendo nila, hindi pa sila nagbabayad ng buwis kasi nasa prangkisa nila na hindi sila dapat magbayad ng buwis ang mahal-mahal ng presyo ng kuryente dahil nagbabayad tayo sa mga proyektong hindi pa tapos,&quot; Suarez added.<div>QUESTIONS ON NGCP OWNERSHIP</div>Fernandez questioned the practices of the NGCP which he said are in violation of Section 8 of Republic Act No. 9511, providing its franchise. Under this law, the grantee shall list, subject to the requirements of the Securities and Exchange Commission (SEC) and the PSE, and make a public offering of the shares representing at least twenty percent of its outstanding capital stock.&quot;The wealth of the NGCP is not being shared to the public… Dapat at least 20 percent of NGCP are being offered to the public. Pero I have so many questions about this issue,&quot; Fernandez said.&quot;Wala po akong nakita kung hindi share swap. Share swap nag-uusap iba-ibang kompanya sa Philippine Stock Exchange. Sila nag-uusap para makapag comply doon sa sinasabi nating Section 8 ng RA 9511. But there is a legal question,&quot; he said.&quot;Hindi po nagkaroon ng tunay na public offering kundi nagkaroon ng private transaction between NGCP and the Synergy Grid Corp. which is still owned by those people who owned NGCP,&quot; he added. Fernandez grilled the NGCP for supposedly not knowing the shareholders of Synergy Corporation, who he claimed are business tycoons. He also questioned the supposed share of NGCP which he said 98.6 percent is composed of private companies and foreign nationals. &quot;In other words, kayo ang bumili sa NGCP at ang natira para sa taumbayan is 1.37 percent which is in violation of Section 8 of RA 9511. That I want you to know na ang nakabili ng share na dapat ay sa public ay ang boss mo mismo,&quot; Fernandez said.The Laguna congressman also said there will be a problem in voting. &quot;Binenta mo ngayon yung 20 percent sa public pero preferred lang siya, hindi siya common share, so mawawalan na ng voting powers ang Filipinos, have you seen the implication of this backdoor that they have done, merong national security content and we have to be wary about this,&quot; he said.Alabanza responded to the claims in a chance interview after the briefing. &quot;Klaro naman po, doon sa Section 8 na dalawa po ang option ng NGCP either mag-IPO po directly or magkaroon ng offering, public offering indirectly. Yan naman po, again, nakasaad po yan sa prangkisa namin. Sinunod po namin yung option na yan. At bukod pa dun po, talagang sinubukan namin talagang tingnan kung lahat ng aming mga kilos ay nasasangayon sa batas. At lahat po yan talaga, idinulog namin sa ERC para maaprubahan at siguraduhin wala kaming vina-violate,&quot; she said.<div>UNFINISHED, UNUSED PROJECTS </div>Lawmakers likewise slammed the NGCP for passing the cost of unfinished or unused capital expenditure (CAPEX) projects onto consumers. &quot;Parang ‘yung mga project na ginagawa pa lang ng NGCP eh hindi pa po nagagamit, hindi pa siya useful, hindi pa siya commissioned, hindi pa natin makikita na siya ay efficient dahil hindi pa siya tapos, sinisingil na natin sa taongbayan,&quot; Fernandez said.&quot;Is it just and fair to impose and ask the consumers to pay for something that is still not operating?&quot; Panel chairperson Parañaque City Rep. Gus Tambunting asked. &quot;Bakit sila naniningil sa isang proyektong hindi pa napakikinabangan ng tao? Kasi common sense would dictate you pay for service. But dito wala pang service binabayaran mo na,&quot; Suarez asked.ERC Chairperson Monalisa Dimalanta explained this is what&#x27;s stated in the regulatory framework. &quot;Yun po kasing sistema po yung regulatory framework governing transmission and distribution supposed to be forward-looking po yan. Isasubmit nila yung mga plano nilang proyekto over the next 5 years, may budget sila doon [at] bibigyan sila ng authority to collect based on an annual breakdown of the approved budget,&quot; she said. &quot;Technically, pwede po under the current framework na kahit di pa tapos nakakapaningil sila unti-unti,&quot; Dimalanta added. Lawmakers questioned this practice being done by the NGCP. &quot;Don&#x27;t you think this is wrong and highly immoral na hindi pa nagagawa yung mga project, hindi pa nacoconsume, hindi pa napapatunayang efficient  binabayaran na siya ng taongbayan?,&quot; Fernandez said. &quot;Hindi po pwede yun... Saan ka nakakita na ang tollway na ginagawa pero binabayaran ng tao? That is absurd, that is highly immoral,&quot; he added.&quot;Bilyon-bilyon ang kinikita ng NGCP so hindi niyo pwede sabihin sa akin na nalulugi kayo kaya kinakailangan niyo ng ganitong pagpasa ng pagbayad sa consumers na hindi pa napakikinabangan,&quot; Suarez said. NGCP Assistant Vice President and spokesperson Cynthia Alabanza said the ERC &quot;allowed&quot; them to do this on an &quot;as spent basis&quot; due to the large CAPEX projects. Dimalanta however said an &quot;as spent&quot; approach cannot be applied in this case because the actual cost of projects and the details are already known. The NGCP said the issues arose from the absence of a regulatory reset and the delay of the process. &quot;May particular rules po na sinasabi tayo na pinapayagan ang NGCP na ganun yung regulatory framework. Unti-unti pong sinisingil para hindi balunan ang consumer pag dating sa dulo,&quot; Alabanza said.&quot;Bagamat wala ho kaming regulatory process, ang sinundan po namin yung huling approved rules, wala ho kaming choice kasi hindi nasundan yung pagpataw ng bagong rules. Kaya po ginamit namin yung dating rules at humingi kami ng interim revenue scheme para patuloy ang trabaho ng NGCP,&quot; she added.Alabanza maintained they followed the previous rules, saying the retroactive application are &quot;may not be fair&quot; to the business. &quot;Hindi po ito issue ng retroactive rate making or rule making, kasi nga po klaro ang regulatory period may specific set of rules. Tama din po punto ng NGCP, hindi po kasi naglabas ng ERC ang rules dati,&quot; Dimalanta said. &quot;When the Commission issued also its decision on that interim MAR, clear naman po na interim siya. Hindi po siya in any way a recognition na tama yung ginagawa niyo kung tama man ginagawa nila. Klaro po na kailangan may full reset bago magkaroon ng bagong rates… Klaro po na it was only an interim arrangement. It wasn&#x27;t a validation that what they implemented was correct,&quot; she added.Dimalanta said under the &quot;as spent&quot; framework, transmission rates could increase by 12 centavos per kilowatt hour over a 12-month period, compared to the refund of P1.00 per kilowatt hour.She said the final determination on transmission rates is expected in January 2025. <div>NGCP ON POSSIBLE FRANCHISE REVOCATION </div>In response to possibility of revoking NGCP&#x27;s franchise, Alabanza is hopeful they will be afforded due process.&quot;Siguro panawagan lang namin ay maigyan kami ng patas na pagkakataon para ipaliwanag yung mga na-raise na mga issues kanina. Kasi lahat po yan, hindi naman po bago yung mga issues at naipapaliwanag natin,&quot; she said. &quot;Marami yung mga datos na ipinanghawakan ang NGCP at kung makikinig lang po ang mga kinaukulan, maliliwanagan din po sila. At any rate, ang NGCP naman po, ang mandato namin talaga ay magpalawig at mag-expand ng transmission system at handa po kami as in the past 15 years na makipagtulungan sa gobyerno para ma-fulfill namin itong mandatong ito,&quot; Alabanza added.The NGCP official maintained they acted in accordance with rules and regulations.&quot;Wala po kaming aksyon na walang basbas ng ERC. Ngayon kung meron pong pagbabago sila ng isip, iba pong matter yun, no? But ang NGCP po, yung dinatna naming patakaran, sinusunod ho namin. Kung meron ho silang feeling na may dapat baguhin, labas na ho kami doon. At kami po ay isang pribadong kumpanya na sumusunod lamang sa mga alituntunin ng ating mga lawmakers,&quot; Alabanza said. &quot;Talagang inamin naman rin ng ERC Chairman Dimalanta na aminado sila na nagkaroon ng delay dun sa reset process. Yun ho talaga kasi yung nakagulo eh. Kung nagawa lang ho ng ERC yung reset process niya na dapat natapos by 2015, baka siguro ho mas madaling maintindihan yung mga situation. Kasi ho nagkaroon na ng pagkasalasalabit ng mga issue na may delay sa regulatory, walang pinangahawakan ng NGCP kundi yung dating naging approval nila at yun ho yung naging aming gabay,&quot; she added.Alabanta shared the impact on the energy sector if ever NGCP&#x27;s franchise is revoked. “Kailangang merong gumawa ng trabaho ginagampanan namin ngayon at meron hong magpopondo nung napakalaking capital expenditure namin ibig sabihin ho niyan kung mawalan po kami ng prangkisa either ang taumbayan from the taxes ang magpopondo nitong CAPEX natin or maghahanap po kayo ng ibang sasagot sa ganitong klaseng undertaking,&quot; she said. The House panel will invite other officials of the NGCP and ERC, shareholders and investors to shed light on the NGCP&#x27;s performance. The first date of the House panel&#x27;s investigation is set for January 6, 2025.<div>RELATED VIDEO</div><div><iframe width="640" height="360" src="https://www.youtube.com/embed/4qpvaLZsxjg?&amp;wmode=opaque&amp;rel=0" frameBorder="0" allowfullscreen="" class="fr-draggable"></iframe> </div>

Lawmakers on Monday said they will look into the 50-year franchise granted to the National Grid Corporation of the Philippines (NGCP), including the possibility of its revocation.

Lawmakers on Monday said they will look into the 50-year franchise granted to the National Grid Corporation of the Philippines (NGCP), including the possibility of its revocation.

Lawmakers to probe NGCP franchise, floats possible revocation

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Lawmakers to probe NGCP franchise, floats possible revocation

Paige Javier,

ABS-CBN News

Published Dec 23, 2024 07:19 PM PHT

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Updated Dec 23, 2024 09:04 PM PHT

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House Committee on Legislative Franchises

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