Review of NGCP franchise, deal with Transco sought in Senate

A review of the National Grid Corporation of the Philippines’ 25-year legislative franchise and its concession agreement with the National Transmission Corporation (Transco) has been sought in the Senate.

Opposition Senator Risa Hontiveros made the call as she filed a resolution seeking a comprehensive, thorough, and extensive inquiry into the massive power outage on Panay Island, explaining that “past investigations and probes have not yielded palpable results.”

In proposed Senate Resolution 890, Hontiveros also raised the need to strengthen the Department of Energy’s (DOE) mechanisms to address simultaneous incidents, unplanned shutdown of power plants, and other generation assets.

“Now therefore, be it resolved as it is hereby resolved to call for the Senate Committee on Energy to conduct an investigation in aid of legislation into issues affecting the stability and reliability of the national power grid which recently led to a widespread power outage affecting four provinces on the island of Panay and the island of Guimaras,” Hontiveros’ resolution read.

Senator Francis Tolentino also filed a separate resolution calling for an investigation into the matter to investigate the cause of the power outages and come up with immediate corrective actions and sustainable solutions to prevent future recurrences.

Further, Tolentino raised the need to determine the reasons for the delay in the completion of power transmission projects in the region and hold appropriate key power players accountable for the sufferings and economic losses brought about by these massive power outages.

Meanwhile, Senator Imee Marcos filed another resolution to investigate the power outage in Panay Island “due to lapses in management” of NGCP.

In her resolution, Marcos wanted to look into:

• Failure of the grid to comply with the Single Outage Contingency Criterion
• Inadequate procurement of ancillary services to prevent outages
• Significant delays in the completion of grid projects

She explained that the NGCP was mandated to prepare and implement the Transmission Development Plan which contains the program for expansion, upgrading, rehabilitation, repair, and maintenance of the transmission system.

“The Visayas-Mindanao Interconnection Project, and the Cebu-Negros-Panay Interconnection projects, all of which are supposed to be completed by 2020 in accordance with the [Transmission Development Plan]. However, this remains uncompleted which has contributed to the inability of the grid to re-route power from other parts of the country to Panay Island,” she said.

Further, Marcos alleged that the NGCP also failed to proactively call on the distribution utilities and electric cooperatives in Panay to manually reduce the load to prevent a sub-system-wide collapse.

Senate energy committee vice chairman Sherwin Gatchalian, who earlier expressed intent to seek an investigation into the issue, proposed to slap fines against NGCP based on the economic losses brought about by the latest power disruption on Panay Island.

“Sa akin opinyon, dapat ang multa ang katumbas ng economic losses na nawala sa lugar na nag blackout para maramdaman ng NGCP ang hirap na dinanas ng mga negosyo doon,” Gatchalian said in a text message to reporters.

(In my opinion, the appropriate fine should be equal to the economic losses felt by the areas hit by the blackout to let the NGCP experience the difficulty facing businesses there.)

He also expressed openness to the proposed investment of the Maharlika Investment Fund (MIF) to the NGCP.

“Posible na mag invest ang MIC sa transmission business dahil una, monopolyo ito, at dahil monopolyo ito, napaka ganda ng kita ng negosyo na ito,” he said.

(It is possible for the MIC [Maharlika Investment Corporation] to invest in the transmission business because first, it is a monopoly. And because it is a monopoly, this business will yield very good income.)

This proposal, however, was questioned by Senator Imee Marcos.

"Abangan?! Aling [NGCP] project, paano papasok [ang] [M]aharlika, magkano ang ilalaan[?]" Marcos, the older sister of the president and the first cousin of Romualdez, said in a text message to reporters.

(Which NGCP projects will be funded by the MIC? How will the MIC take over? How much will be invested in NGCP?)

"Kaloka [M]aharlika, sa [S]enators' lounge pa lang noon, [di] magkasundo Diokno at Medalla, tas panay kibit ng balikat ni Balisacan. [Kaya] hanggang ngayon malabo sagot nu'ng Consing... Kaya nga [di]  ko maiboto yan nun," she said.

(This is crazy. When Maharlika was discussed in the Senators' Lounge before, Diokno and Medalla were in a disagreement while Balisacan was just disregarding it. Until now, the statement of Consing is not clear. That's why I did not vote for that.)

Marcos was referring to Finance Secretary Benjamin Diokno, former Central Bank of the Philippines Governor Felipe Medalla, and NEDA Secretary Arsenio Balisacan.

Last week, Speaker Martin Romualdez proposed the use of MIF to capacitate the NGCP.

This was supported by Maharlika Investment Corporation president Rafael Consing Jr.

Romualdez said MIC's "strategic investment could provide essential capital for infrastructure upgrades and help in lowering the cost of electricity for consumers."

Consing, in supporting Romualdez's idea, said that "investing in NGCP through Maharlika is about investing in the Philippines' future. It will be a bold step towards securing our energy independence, fueling economic prosperity, and ensuring a brighter tomorrow for every Filipino."

However, Consing said the decision to invest still requires careful consideration and thorough due diligence.

MIC conducted its first board meeting on January 3 where it discussed the MIF capitalization and potential sectors for investment.

During the meeting, the state-owned firm's Board of Directors approved the presented company’s capitalization scheme amounting to P125 billion, according to the Department of Finance (DOF).

MIC is the government-owned firm tasked to mobilize the country's first sovereign wealth fund. —KG, GMA Integrated News