National Grid Corporation of the Philippines
 | |
 Corporate headquarters of NGCP | |
| Type | Private company |
|---|---|
| Industry | Electric utility |
| Founded | January 15, 2009 |
| Headquarters | Power Center, Quezon Avenue corner Senator Miriam P. Defensor-Santiago (BIR Road), Diliman, Quezon City 1100, Metro Manila, Philippines |
Key people |
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| Website | www |
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 and transmission service provider, 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), and updates the daily power situation outlook for Luzon, Visayas, and Mindanao power grids (which can be seen on its Facebook page as well as on the business section of newspapers since March 2011 like The Philippine Star, Philippine Daily Inquirer, and Manila Bulletin) 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).
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.
History
2001–2009: Power grid before the privatization of operations and maintenance, grid under Philippine government control
2001–2003: National Power Corporation (NAPOCOR/NPC) as power grid owner and operator, turnover of power grid operations, maintenance, and ownership from NAPOCOR/NPC to TransCo
On June 8, 2001, President Gloria Macapagal Arroyo signed RA 9136 (Electric Power Industry Reform Act), which introduced market competition in the energy sector and mandated the creation of National Transmission Corporation (TransCo) 18 days after the law was approved on June 26, 2001. TransCo was a unit of another government-owned corporation National Power Corporation (NAPOCOR/NPC), with the latter operated, maintained and owned the country's power grid during that time, before the transfer of the grid to the former on March 2003.[2]
On March 1, 2003, TransCo took over the operations, maintenance, and ownership of the power grid from NAPOCOR/NPC as mandated on RA 9136 or EPIRA that organized the industry into four sectors: generation, transmission, distribution, and supply which officially started the former to operate, maintain, and own the grid and its associated assets and facilities.
2003–2009: TransCo as power grid operator, privatization of grid operations and maintenance
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."[3][4][5] This initiated the privatization process for the transmission sector.[6]
On February 21, 2008, NGCP was registered with the Securities and Exchange Commission (SEC).
On February 28, 2008, its concession agreement with TransCo was executed and became effective. The agreement between NGCP and TransCo was signed by TransCo president Arthur Aguilar, PSALM president Jose Ibazeta, and NGCP directors Walter Brown, Elmer Pedregosa and Du Zhigang.[7][8]
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, NGCP took over the operations and management of the national transmission system from TransCo which officially started the former to operate and maintain the country's power grid and its related assets and facilities and privatized the grid operations and maintenance, with Walter A. Brown as the company's first president.
2009–present: NGCP as power grid operator, privatized grid operations and maintenance, grid under private control
As a result of the privatization of the power grid operations and maintenance with the turnover from TransCo to NGCP on January 15, 2009, former power grid operator TransCo appointed NGCP to act as its Construction Manager (CM) to do the unfinished parts of transmission projects under Projects Under Construction (PUC) as an independent contractor for and on its behalf by acquiring, building and designating parts and components of the ongoing transmission project under PUC on portions that were not yet acquired and designated by TransCo and making revisions on a project under PUC, and projects under PUC that were not initially started by TransCo, in accordance with the requirements of the Concession Agreement between TransCo and NGCP, and makes or plans any new projects through the Transmission Development Plan (TDP).
On March 26, 2010, Roque Corpuz was appointed as the company's second president, replacing Walter A. Brown.[9] Three months later on June 20 of that same year, Henry Sy Jr. became the third NGCP president.[10]
On August 23, 2010, Department of Energy (DOE) issued Department Order DO2010-08-0015 creating a Technical Working Group to audit NGCP system operations.
On March 2011, the daily power situation outlook for Luzon, Visayas, and Mindanao power grids started to be printed on business section of newspapers such as The Philippine Star, Philippine Daily Inquirer, and Manila Bulletin.
DOE issued its first Transmission Development Plan as power grid operator which is the 2009 TDP that would provide a guide for NGCP in improving the reliability of the electricity backbone in April 22, 2016. 2009 TDP contains some information made by TransCo, NGCP's predecessor in power grid operations and maintenance, such as the project components that were originally planned to be made on a particular transmission project before some or all components were changed and revisions were made on a project when NGCP is now the power grid operator.
In May 2017, TransCo accused NGCP with violating its concession agreement with the power grid operator 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.[11]
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.[12]
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 June 8, 2018, the Department of Information and Communications Technology (DICT), NGCP, and TransCo signed an agreement on Friday for a national broadband plan that will help accelerate internet connectivity nationwide. Under the agreement, the DICT will utilize TransCo’s reserved optical fiber to distribute connectivity from Luzon to Mindanao using the submarine cables that will be laid down by Facebook from the United States to Asia. The agreement plans to expand the internet connectivity in public places for free by building an additional 200,000 access points nationwide by 2022, DICT Officer-In-Charge Eliseo Rio said.[13]
In 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.[citation needed]
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”.
On July 26, 2019, 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 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 delayed projects by NGCP as well as the already deferred initial public offering.[citation needed]
On May 31, 2021, DoE announced the Luzon grid was experiencing limited power reserves. The following day, according to DoE, a longer period for a red alert status over the Luzon grid was needed due to additional power plant outages.
On June 2, 2021, a lawmaker in the House of Representatives called for a congressional inquiry into the rolling brownouts experienced in 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. The reserve would be ancillary services 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”, apparently referring to the NGCP concession with the government.
Franchise law and concession agreement
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 assets and facilities. Its franchise only covers the operations, maintenance, and expansion of the power grid. Assuming it secures a renewal, it has a 50-year concession period from its creation on January 15, 2009 to 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.[14][15][16][17][18]
Acquisition and designation of lands for transmission structures and right-of-way, and construction of power line structures
As stated before, NGCP has a right of eminent domain necessary to construct, expand, maintain, and operate the transmission system under its franchise as it is able to commence and pursue eminent domain proceedings for the purpose of acquiring and designating new lands for the transmission structures and their respective foundations, and right of way (portions of a power line) that are required to carry out its responsibilities using its name which makes NGCP may act as the owner of lands where the structures and their foundations stand, right of way and entirely new structures called as replacement structures that were acquired, designated and built from January 15, 2009 or during the concession period, and once its franchise expires and concession period ends, these will be transferred to TransCo.
Under the NGCP's concession agreement with TransCo, the TransCo name should be used as TransCo's agent if a land where the structures and foundations stand and particular portions of the power line were acquired and designated by TransCo or prior to the turnover of operations and maintenance of the power grid from TransCo to NGCP and start of concession period on January 15, 2009 even before the structures were built.[19] Transmission structures that were already built before January 15, 2009 but the transmission line itself is not yet finished are also counted as TransCo-acquired, designated and built lands, portions of a power line or right of way, and structures. These situations are in accordance with one of the mandates of TransCo which is to handle all existing cases including right-of-way and claims which accrued until January 14, 2009 or before the turnover of operations and maintenance of the grid to NGCP and start of concession period on January 15 of the said year.
Organization
Below is a table listing the board of directors and officials of NGCP.[20] The NGCP organization or board of directors consists of a chairman, two vice-chairmen, and seven directors. The president serves as the head of NGCP.
| 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 |
| Anthony Almeda | Director, President and CEO | 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. |
| 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 |
| 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.[21]
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 | Eastern | Samar and Leyte |
| 2 | Central | Cebu and Bohol |
| 3 | Negros | Negros Island |
| 4 | Western | Panay 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 del Norte, Maguindanao del Sur, and Sarangani |
See also
References
- ^ "Corporate Profile - National Grid Corporation of the Philippines: The Company". ngcp.ph. Retrieved December 28, 2020.
- ^ "NGCP wields absolute power in TransCo deal". Daily Tribune. Retrieved August 6, 2021.
- ^ "Manila Times, RP-China group wins $3.95-B TransCo bid". The Manila Times. Archived from the original on December 13, 2007. Retrieved June 23, 2019.
- ^ "Two groups vie for multi-billion dlr Manila power deal". December 12, 2007. Retrieved June 23, 2019 – via uk.reuters.com.
- ^ "Abs-Cbn Interactive, Monte Oro consortium wins TransCo bidding". Archived from the original on July 9, 2007. Retrieved June 23, 2019.
- ^ Ralf Rivas (May 29, 2023). "EXPLAINER: How China got into the Philippines' power grid". Rappler. Retrieved May 31, 2023.
- ^ "NGCP wields absolute power in TransCo deal". Daily Tribune. Retrieved August 6, 2021.
- ^ Mario J. Mallari (October 17, 2019). "NGCP in yellow-dog contract?". Daily Tribune. Retrieved September 8, 2022.
- ^ "Former TransCo COO is new NGCP president". www.philstar.com. Retrieved September 23, 2020.
- ^ "NGCP elects Henry Sy Jr. as president and CEO". GMA News Online. Retrieved June 23, 2019.
- ^ Inquirer, Philippine Daily (May 17, 2017). "Biz Buzz: Round One to NGCP". business.inquirer.net. Retrieved June 23, 2019.
- ^ News, ABS-CBN (March 7, 2018). "Henry Sy Jr steps down as NGCP president, CEO". ABS-CBN News. Retrieved June 23, 2019.
{cite web}:|last=has generic name (help) - ^ "DICT, NGCP, TransCo sign deal on internet connectivity". ABS-CBN News. Retrieved March 2, 2022.
- ^ "TransCo". transco.ph. Retrieved June 23, 2019.
- ^ "Corporate Profile - National Grid Corporation of the Philippines: History". ngcp.ph. Retrieved December 28, 2020.
- ^ "NGCP - National Grid Corporation of the Philippines". February 18, 2016. Archived from the original on February 18, 2016. Retrieved June 23, 2019.
- ^ Electric Power Industry Reform Act (EPIRA) law or Republic Act 9136
- ^ "TransCo withdraws bid to interconnect power grids - DOE - Department of Energy Portal". www.doe.gov.ph. Retrieved June 23, 2019.
- ^ "Concession Agreement for the construction, installation, maintenance, rehabilitation, repair and refurbishment of the nationwide transmission and Sub-transmission systems in the Republic of the Philippines among Power Sector Assets and Liabilities Management Corporation, National Transmission Corporation, and National Grid Corporation of the Philippines (February 2008)" (PDF). transco.ph. May 29, 2003. Retrieved October 23, 2021.
- ^ "Corporate Profile - National Grid Corporation of the Philippines: The Board of Directors". ngcp.ph. Retrieved December 28, 2020.
- ^ "Operations - National Grid Corporation of the Philippines: Business Scope". ngcp.ph. Retrieved December 28, 2020.
External links
- Official website
- National Grid Corporation of the Philippines on Facebook
- National Grid Corporation of the Philippines on Twitter
- For more details about NGCP's franchise law, EPIRA law, and power grid operator's concession agreement with TransCo, see: these websites and this PDF document.
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