National Grid Corporation of the Philippines

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National Grid Corporation of the Philippines
TypePrivate company
IndustryElectric utility
FoundedJanuary 15, 2009; 12 years ago (2009-01-15)
HeadquartersPower Center, Quezon Avenue corner BIR Road, Diliman, Quezon City 1100, Metro Manila, Philippines
Key people
Zhu Guangchao (Chairman)
Henry T. Sy Jr. (Vice Chairman)
Anthony Almeda (President)
Websitewww.ngcp.ph

The National Grid Corporation of the Philippines (NGCP) is a privately owned corporation that was created on January 15, 2009, through RA 9511. It is a consortium of three corporations, namely Monte Oro Grid Resources Corporation, Calaca High Power Corporation, and the State Grid Corporation of China. As the franchise holder, it is in charge of operating, maintaining, and developing the country's state-owned power grid,[1] controls the supply and demand of power by determining the power mix through the selection of power plants to put online (i.e., to signal power plants to produce power, as power plants will only produce power or feed their power to the transmission grid when directed by NGCP). As a common carrier, it must provide non-discriminatory access to its transmission system. It is subject to the standards set by the Philippine Grid Code and the Transmission Development Plan. It also updates the daily power situation outlook for Luzon, Visayas, and Mindanao power grids by determining the available generating capacity, system peak demand, and operating margin (with operating margin is determined by subtracting the available generating capacity and system peak demand, and all of which are in units of MW or megawatts).

Facade, entrance

History[]

2000s[]

On June 8, 2001, legislators passed and former president Gloria Macapagal Arroyo signed RA 9136 which is also known as the Electric Power Industry Act or EPIRA law to save the ailing energy industry. It introduced two major reforms: the restructuring of the electricity supply industry and the privatization of the National Power Corporation (NPC). It also led to the creation of another government-owned corporation named National Transmission Corporation (TransCo) which turned over the NPC's management, ownership, construction, expansion, and maintenance of the transmission facilities on March 1, 2003.

On December 12, 2007, two consortia bid for a 25-year license to run the Philippine power grid - privatization of the management of TransCo: the consortium of Monte Oro Grid Resources Corp., led by businessman Enrique Razon, comprising the State Grid Corporation of China, and Calaca High Power Corp., WON in an auction conducted by the Power Sector Assets and Liabilities Management (PSALM) Corp. as it submitted the highest offer of $3.95 billion, for the right to operate TransCo for 25 years, outbidding San Miguel Energy, a unit of San Miguel Corporation (bid of $3.905 billion), Dutch firm TPG Aurora BV and Malaysia's TNB Prai Sdn Bhd. Jose Ibazeta, PSALM president and CEO remarked: “We are very happy about the successful turnout of the bidding for TransCo. PSALM handled the privatization of the government’s transmission business with utmost transparency and judiciousness."[2][3][4]

On February 28, 2008, its concession agreement with TransCo was executed and became effective.[5]

Congress approved bicameral resolution granting franchise to NGCP to manage and operate its transmission facilities nationwide in November 2008.

On December 1, 2008, Gloria Macapagal Arroyo signed the RA 9511 which gives it the franchise to operate and maintain the transmission facilities of TransCo.

On January 15, 2009, it officially started its operations and management over the national transmission system, with Walter A. Brown as the company's first president. It continued to do the transmission projects that are under Projects Under Construction (PUC) that were unfinished by TransCo on its first few years by acquiring, building and designating parts and components of the transmission project under PUC on portions that were not yet acquired and designated by TransCo and making revisions on a project under PUC, and makes or plans any new projects through the Transmission Development Plan (TDP).

2010s[]

On March 26, 2010, Roque Corpuz was appointed as the company's second president, replacing Walter A. Brown.[6] Three months later on June 20 of that same year, Henry Sy Jr. became the third NGCP president.[7]

On August 23, 2010, Department of Energy (DOE) issued Department Order DO2010-08-0015 creating a Technical Working Group to audit NGCP system operations.

DOE issued its 2009 TDP that would provide a guide for NGCP in improving the reliability of the electricity backbone in April 22, 2016.

In May 2017, TransCo accused the company with violating the terms of its contract by supposedly making too much money from its operations of the country's electricity grid. Executive Secretary Salvador Medialdea pointed out that, if indeed NGCP had violated the terms of its contract by profiting unduly from the operations of the power grid such as allowing telecommunications firms to mount their fiber optic cables on the transmission towers.[8]

On March 7, 2018, Henry Sy Jr. resigned as president and CEO, with Chief Administrative Officer Anthony Almeda named as the company's new president.[9]

On April 5, 2018, Energy Regulatory Commission (ERC) issued Resolution 4 ordering NGCP to procure a third party auditor for the systems operations audit but was never implemented. Shortly after, the Philippine Electricity Market Corporation through its audit committee drafted terms of reference for an independent auditor but NGCP replied that only ERC has regulatory powers over it.

On July 2018, local officials asked NGCP to explain millions of pesos of pass-on costs to customers as a result of damage incurred as a result of typhoons. The Sangguniang Panlalawigan (SP or Provincial Board) of Ilocos Norte, for instance, passed a resolution asking the NGCP management to make a full disclosure of its request to the ERC for provisional approval of the collection of the force majeure pass-through costs from its clients.

On April 11, 2019, Energy Secretary Alfonso Cusi said his agency committed to implement institutional solutions in ensuring sufficient electricity to meet consumers’ needs, in view of thinning power supply that has at times dipped to critical levels. Cusi said “short-term answers are not enough”.

DoE informed NGCP of the appointment of Delloitte Touche Tohmatsu India LLP-Navarro Amper and Co. as a consultant for the pilot audit of transmission facilities but NGCP replied that it cannot accede to the pilot audit as it is not a party between the consultant and the DoE on July 26, 2019.

On November 26, 2019, Senator Risa Hontiveros filed a resolution urging Congress to conduct a national security audit on the operations and facilities of NGCP amid recent revelations of foreign access and control over the country’s power transmission system. In proposed Senate Resolution 223, which Hontiveros filed, she also called on the Senate to look into the national security implications of foreign access to NGCP’s power transmission facilities. The need for immediate assessment of NGCP’s system was raised by Energy Secretary Alfonso Cusi on December 3, 2019 as he indicated it is not impossible now to operate the power system remotely from anywhere amid calls to review the 40 percent stake of State Grid Corporation of China.

On December 4, 2019, Senate probes the delayed projects of NGCP as well as the deferred initial public offering.

2020s[]

On May 31, 2021, DoE said the Luzon grid was experiencing limited power reserves. The following day, according to DoE, longer period for a red alert status over the Luzon grid is due to additional power plant outages.

On June 2, 2021, a lawmaker at the House of Representatives called for a congressional inquiry into the rotational brownouts experienced in Metro Manila and other parts of Luzon.

On June 10, 2021, Cusi proposed to the Senate to allow the national government to participate in the power sector, particularly in securing reserve capacity for the country. In a Senate hearing, Cusi urged lawmakers to look into allowing the government to engage in limited power generation to augment energy supply requirements when needed. The DoE chief likewise wanted to revert to government the management of ancillary services contract to ensure the reliability of the grid and the following day, he said preventing power outages in the system, will require a regulating reserve which is equivalent to four percent of the peak demand plus the capacity of the biggest power plant in the system that are ancillary services they should be contracted by the NGCP in preparation for the dry months. NGCP failed to secure 100 percent of firm contracts for ancillary service. Cusi noted the whole issue is not about power crisis but compliance with the terms of the contract that NGCP signed with the government.

On June 14, 2021, President Rodrigo Duterte said in his weekly address: “I hold everyone responsible to comply with regulations. Unreliable power and the recent outages in Luzon pose a serious threat not only to our Covid-19 response measures but also to our economic recovery”, which he apparently referring to the NGCP concession with the government.

Franchise law[]

Unlike outright sale, the concession agreement allowed the Philippine government to keep ownership of the transmission assets through TransCo, in accordance with Section 8 of Electric Power Industry Reform Act (EPIRA) or Republic Act 9136 which states that no person, company, or entity other than TransCo who shall own any transmission facilities.[10][11][12][13][14] Its franchise only covers the operations, maintenance, and expansion of the power grid. It officially started operations on January 15, 2009. Assuming it secures a renewal, it has a total of 50 years and will end on December 1, 2058. Under its franchise, it has the right to operate and maintain the transmission system and related facilities, and the right of eminent domain necessary to construct, expand, maintain, and operate the transmission system.

For more details about its franchise law and EPIRA law, visit these websites.

Organization[]

Below is a table listing the board of directors and officials of NGCP.[15]

Name Position Credentials
Zhu Guangchao Chairman Vice Chief Engineer and Director General of International Cooperation Department of the State Grid Corporation of China (SGCC), Vice Chairman of Redes Energeticas Nacionais SA in Lisboa, Portugal, and Board Director of Hongkong Electric Company
Robert Coyiuto Jr. Vice Chairman CEO of Prudential Guarantee and Assurance, Inc., chairman of the Board of PGA Cars, Inc. and PGA Sompo Insurance, Inc., Vice Chairman of First Life Financial Co., Inc., President, Oriental Petroleum and Minerals Corporation, Director, Canon Philippines, Inc., and Director, Universal Robina Corporation
Henry Sy Jr. Vice Chairman Vice-Chairman, SM Investments Corporation, Vice-Chairman and CEO of SM Development Corporation and Vice-Chairman and President of Highlands Prime, Inc. and SM Land, Inc. He also sits as Director of SM Prime Holdings, Inc. and Banco de Oro Unibank, Inc
Jose Pardo Director Chairman, Philippine Stock Exchange, Electronic Commerce Payment Network, Inc., OOCC General Construction Corp., and Philippine Savings Bank and Director, ZNN Radio Veritas, Bank of Commerce, JG Summit Holdings, Inc., and Bank of Commerce Investment Corporation
Francis Chua Director Chairman Emeritus, Philippine Chamber of Commerce and Industry, Inc., President, DongFeng Automotive, Inc., and Member of Board Directors, Philippine Stock Exchange and the Bank of Commerce
Shan shewu Director Chief Representative, State Grid Corporation of China (SGCC) Philippine Office
Liu Ming Director Deputy Chief Representative, State Grid Corporation of China (SGCC) Philippine Office, former Chief Representative of SGCC Africa Office, and Technical Director of Market Exploration of SGCC Australia Office.
Liu Xinhua Director Engineer with a master's degree and one of the topnotchers in the CPA Board Exam of China
Anthony Almeda Director Chairman and CEO, ALALMEDA Land, Inc., and Director, Blue Ocean Acquisitions, Inc., CUTAD, Inc., BS Square Commercial, Inc., PACIFICA 21 Holdings, Inc., Leisure & Resort World, Inc., BIGBOX 21, Inc., and MIGUELUNDA Educational Corporation.
Paul Sagayo Jr. Director Partner - Sagayo Law Offices, and Professor, San Beda College of Law

Presidents[]

  • Walter A. Brown (January 15, 2009 – March 26, 2010)
  • Roque Corpuz (March 26–June 20, 2010)
  • Henry Sy Jr. (June 20, 2010 – March 7, 2018)
  • Anthony Almeda (March 7, 2018–present)

Business scope[]

Below is a table listing the district numbers and what areas or provinces that each district covers.[16]

Luzon[]

North Luzon[]

District Area Service Area
1 Ilocos Ilocos Norte, Ilocos Sur, Abra, and La Union
2 Mountain Province Mt. Province and Benguet
3 Central Plain East and West Pangasinan
4 Cagayan Valley Nueva Vizcaya, Quirino, Ifugao, Isabela, Cagayan, Kalinga, and Apayao
5 Western Central Plain Bataan and Zambales
6 South Central Plain Pampanga and Tarlac
7 NCR Bulacan, Rizal, and Metro Manila

South Luzon[]

District Area Service Area
1 South Western Tagalog Batangas, Cavite, and South of Metro Manila
2 South Eastern Tagalog Laguna and Quezon
3 Bicol Camarines Norte, Camarines Sur, Albay, and Sorsogon

Visayas[]

District Area Service Area
1 Western Panay Island
2 Central Cebu and Bohol
3 Eastern Samar and Leyte
4 Negros Negros Island

Mindanao[]

District Area Service Area
1 North Western Zamboanga del Norte, Zamboanga del Sur, and Misamis Occidental
2 Lanao Lanao del Norte and Lanao del Sur
3 North Central Bukidnon and Misamis Oriental
4 North Eastern Agusan del Norte, Agusan del Sur, Surigao del Norte, and Surigao del Sur
5 South Eastern Davao, Davao del Norte, Davao del Sur, Compostela Valley, and Davao Oriental
6 South Western North Cotabato, South Cotabato, Sultan Kudarat, Maguindanao, and Sarangani

See also[]

References[]

  1. ^ "Corporate Profile - National Grid Corporation of the Philippines: The Company". ngcp.ph. Retrieved December 28, 2020.
  2. ^ "Manila Times, RP-China group wins $3.95-B TransCo bid". Archived from the original on December 13, 2007. Retrieved June 23, 2019.
  3. ^ "Two groups vie for multi-billion dlr Manila power deal". December 12, 2007. Retrieved June 23, 2019 – via uk.reuters.com.
  4. ^ "Abs-Cbn Interactive, Monte Oro consortium wins TransCo bidding". Archived from the original on July 9, 2007. Retrieved June 23, 2019.
  5. ^ "NGCP wields absolute power in TransCo deal". Daily Tribune. Retrieved August 6, 2021.
  6. ^ "Former TransCo COO is new NGCP president". www.philstar.com. Retrieved September 23, 2020.
  7. ^ "NGCP elects Henry Sy Jr. as president and CEO". GMA News Online. Retrieved June 23, 2019.
  8. ^ Inquirer, Philippine Daily. "Biz Buzz: Round One to NGCP". business.inquirer.net. Retrieved June 23, 2019.
  9. ^ News, ABS-CBN. "Henry Sy Jr steps down as NGCP president, CEO". ABS-CBN News. Retrieved June 23, 2019.
  10. ^ "TransCo". transco.ph. Retrieved June 23, 2019.
  11. ^ "Corporate Profile - National Grid Corporation of the Philippines: History". ngcp.ph. Retrieved December 28, 2020.
  12. ^ "NGCP - National Grid Corporation of the Philippines". February 18, 2016. Archived from the original on February 18, 2016. Retrieved June 23, 2019.
  13. ^ Electric Power Industry Reform Act (EPIRA) law or Republic Act 9136
  14. ^ "TransCo withdraws bid to interconnect power grids - DOE - Department of Energy Portal". www.doe.gov.ph. Retrieved June 23, 2019.
  15. ^ "Corporate Profile - National Grid Corporation of the Philippines: The Board of Directors". ngcp.ph. Retrieved December 28, 2020.
  16. ^ "Operations - National Grid Corporation of the Philippines: Business Scope". ngcp.ph. Retrieved December 28, 2020.

External links[]

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