Questions on the possible legal concerns —which could do more harm than good to the government— were raised following Maharlika Investment Corporation’s formal acquisition of equity holdings in the National Grid Corporation of the Philippines (NGCP).
According to House Senior Deputy Minority Leader and Northern Samar 1st District Rep. Paul Daza, the act in itself may trigger an imbalance in the government’s function in view of conflict of interest.
“Remember, a strong regulatory oversight must always be in place to ensure fairness and efficiency in the power sector. For example, how can we now penalize NGCP for violations if we’re also part of the board?” Daza said in a story which appeared in the Manila Times.
However, Energy Secretary Raphael Lotilla doesn’t seem bothered even as he insisted that securing a 20 percent stake in the NGCP is a welcome development for the government’s pursuit of energy security.
“This is a step toward attaining our goal of ensuring security of supply, reliability, affordability, and promoting competition in the power sector,” Lotilla said in reference to MIC’s acquisition of NGCP shares.
IN FULL CONTROL
Established in 2009 through Republic Act 9511, NGCP has exercised full authority over the management and operations of the nationwide transmission system, a critical public utility, under a franchise granted by the Philippine Congress.
NGCP, a consortium of three corporations – Monte Oro Grid Resources Corporation, Calaca High Power Corporation, and the State Grid Corporation of China (SGCC) – transmits energy from the coal-fed power plants to the distribution utility companies like Meralco.
It’s in charge of operating, maintaining, and developing the country’s power grid and its related assets and facilities, controls the supply and demand of power by determining the power mix through the selection of power plants to put online.
And yes, NGCP could play God who gave us light. But unlike God, NGCP may opt to rephrase a line or so in the Bible’s Book of Genesis — “let there be darkness,” instead of “let there be light.”
WHOSE CONTROL?
During congressional hearings, legislators have expressed alarm over what they claimed as a pressing issue — foreign control of the NGCP.
Under existing laws, foreign ownership in public utilities like the energy sector is limited to 40 percent ownership, allowing the SGCC to “invest” that much in the NGCP.
However, allowing a significant portion of the national energy infrastructure to fall under the influence of foreign entities may pose risk not only to the country’s energy security but also to national sovereignty amid China’s dominance and aggression in the West Philippine Sea.
NGCP insisted that the public utility firm is 60 percent Filipino-owned, but a closer look says otherwise. The fact that SGCC controls 40 percent of the NGCP is a direct affront to the foundational principles meant to dictate the ownership of the Philippines’ vital industries.
Worse, the NGCP board is headed by a Chinese national as chairman, not to mention other key positions relegated to SGCC executives.
And yes, NGCP could play God who gave us light. But unlike God, NGCP may opt to rephrase a line or so in the Bible’s Book of Genesis — “let there be darkness,” instead of “let there be light”.
TIMELY INVESTMENT
The government’s decision to invest in the country’s power transmission is consistent with the Philippine Development Plan (PDP) 2023-2028 approved by President Ferdinand Marcos, Jr.
“Investment in transmission expansion offers enormous potential benefits for efficiency by increasing access to low-cost generation, improving reliability and counterbalancing market power,” reads part of the statement issued by the Department of Energy (DOE).
The transmission lines are vital to the power sector as new generation projects rely on transmission wires to deliver electricity to customers, with NGCP responsible for such wires and facilities and the operation of the national power grid system.
NGCP decides when transmission wires and substations could operate and where, and MIC’s entry in NGCP will help address delays in completing transmission projects while providing for additional capital to help lower both the risks of power outages and higher electricity prices.
MERALCO IS NEXT
During the time of the late former strongman Ferdinand Marcos, Sr., the government was in control of the energy sector – including the distribution utility companies like the Manila Electric Company (Meralco).
Is his son and namesake taking the same road?
With the MIC’s acquisition of shares at the NGCP, there is a possibility that the government would set sight on Meralco which has long been a subject of complaints amid excessively high charges and other legal complexities.
Taking a closer look at the Meralco monthly billing statements would show only three percent of the amount we’re supposed to pay goes to transmission. The biggest chunk is for generation and distribution.
Assuming a household is paying an average of P14,000 per month, half of it corresponds to the consumed electricity.
Distribution charges are pegged at 23 percent or around P3,200. Others reflected in the bill include system loss which compels consumers to pay for what Meralco lost from electricity theft, subsidies, government-imposed taxes, universal charges, the so-called FIT All, and the spurious “other charges.”
