Review NGCP franchise, DOE urges Congress
MANILA, Philippines — The Department of Energy (DOE) has asked Congress to review the National Grid Corp. of the Philippines’ (NGCP) franchise to operate and manage power transmission lines, describing it as “overly generous.”
“The concession agreement is very much in favor of the franchisee. It is within the powers of Congress to review it before expiration thereof,” Energy Undersecretary Sharon Garin told members of the House energy committee on Tuesday.
“We should be stricter … and give them (NGCP) more obligations and give more role to the government … [in line with its powers] to mandate or control the NGCP,” she added.
Garin made the remark amid calls for Congress to investigate power transmission disruptions and rotational blackouts across the country after the NGCP raised red and yellow alerts due to the tripping of the Bolo-Masinloc 230 kilovolt Line 2.
During the committee hearing, which was meant to be a briefing on proposed amendments to the Electric Power Industry Reform Act (Epira), energy officials said that around 80 percent of the country’s electricity problems may be linked to the “generous franchise” given to the NGCP in 2008.
‘Take over the project’
Republic Act No. 9511 authorized the NGCP to engage in conveying or transmitting electricity through interconnected transmission lines and to pay a franchise tax equivalent to three percent of all gross receipts from operations.
Garin said this was one of the reasons most of the agency’s proposed amendments centered on changing the Epira law on power transmissions, as it was one of the sector’s major problems.
Apart from reviewing the NGCP franchise, the DOE recommended a government takeover of the NGCP’s projects should it fail to meet its target.
“If the NGCP cannot comply with a project as scheduled, then the government should be allowed to take over the project,” said Garin who noted that in some cases, projects were delayed for two years or longer.
Due to the delays, “we end up with many generation plants that are unable to connect to the grid, and even if they get connected, if the distribution utilities are not yet connected, then we cannot deliver to our consumers,” she told reporters after the hearing.
“That’s why we tried to craft something to make the transmission company accountable. Amendments to the franchise can also fix that. We agree that 80 percent of the problem of energy will be fixed with these,” Garin said.
Earlier, the Senate public services committee said that it would “thoroughly scrutinize” NGCP’s operations after Sen. JV Ejercito moved to pull the plug on China’s role in the country’s power transmission business.