DoE expects NGCP audit to start this year 

THE Department of Energy (DoE) said it expects to begin reviewing the operations of the National Grid Corp. of the Philippines (NGCP) sometime this year, amid calls to renationalize the grid operator.

“We are going to do a more comprehensive study in terms of looking at the status of transmission lines, the nature of problems, and what are the solutions to these,” Energy Secretary Raphael P.M. Lotilla told reporters on the sidelines of ACEN Corp.’s wind farm inauguration in Ilocos Norte on Friday.

Mr. Lotilla gave no detailed timeline for the launch of the review, but added that some prerequisites are needed before it can start, including reports due for submission to the Energy Regulatory Commission (ERC).

The groundswell for an NGCP performance audit began with the tripping of transmission lines on May 8, which raised red and yellow alerts over the Luzon power grid.

The Energy department has also cited delayed transmission projects as a factor in the tight supply of power.

“What is important is that we finish these projects first and foremost. These are the ones that are going to free up stranded power,” Mr. Lotilla said.

Apart from performance issues, a Chinese stake in the NGCP had also renewed national security concerns.

A consortium led by Henry Sy, Jr. and Robert Coyiuto, Jr. won a 25-year concession to run the power transmission network in December 2007. State Grid Corp. of China holds a 40% stake in NGCP.

At the same event, President Ferdinand R. Marcos, Jr. told reporters that there needs to be a good reason to withdraw NGCP’s franchise.

“What I’ve been hearing from news items is the security problem; that will be part of the discussion. But what I’m looking at is the performance; Have they been performing? Are they following the contract with the government?” Mr. Marcos said during the inauguration of ACEN’s wind farm.

“Because if the franchise is revoked, then we will have to find somebody else to operate the grid,” he added.

Mr. Marcos said that the national security aspect is also being studied. He said the NGCP signed a memorandum of understanding with the National Intelligence Coordinating Agency to address any such concerns, particularly in the area of cybersecurity.

“The ERC as the regulator will be conducting a full regulatory performance review, while the PSALM (Power Sector Assets and Liabilities Management Corp.) and Transco (National Transmission Corp.) as the counterparties to the concession agreement at the same time will conduct contractual performance review,” Mr. Lotilla said.

“Our review focus is really financial. But there is (also) a review on the asset base. The asset base includes of course existing assets and their construction of the proposed projects,” ERC Chairperson and Chief Executive Officer Monalisa C. Dimalanta, told reporters in a separate energy conference last week.

The NGCP has said that it welcomes all audits within the framework of the rules.

The NGCP also said that it introduced many improvements to the transmission system since it took over the ageing government-run transmission system in 2009. — Ashley Erika O. Jose