ERC dismisses TransCo-PSALM’s intervention plea in NGCP’s IPO case

By Myrna M. Velasco – August 1, 2019, 10:00 PM
from Manila Bulletin

The Energy Regulatory Commission (ERC) has junked the joint petition of state-run firms National Transmission Corporation (TransCo) and Power Sector Assets and Liabilities Management Corporation (PSALM) that sought intervention on the extension bid of National Grid Corporation of the Philippines (NGCP) for its required initial public offering (IPO) or stocks listing.

ERC logo(Photo courtesy of www.erc.gov.ph)

ERC logo(Photo courtesy of www.erc.gov.ph)

In an order promulgated by the ERC on July 24 this year, the regulatory body ruled that “the petition for intervention filed by TransCo and PSALM is hereby denied for lack of merit.”

The ERC similarly disparaged TransCo and PSALM on their move questioning its jurisdiction to decide on the IPO extension appeal of NGCP.

“It is the Commission who has jurisdiction to hear and decide the matters being the administrative agency of special competence,” the ERC argued.

It further stressed that “contrary to the allegations of TransCo and PSALM, the EPIRA (Electric Power Industry Reform Act) Law and its IRR (implementing rules and regulations) as well as the provision of Republic Act 9511 (or the NGCP Franchise Law) duly established the Commission’s jurisdiction over the instant petition, being the regulatory agency of the government having the sole authority to regulate the transmission business.”

Citing established jurisprudence, the ERC similarly noted that “only a statute can confer jurisdiction on courts and administrative agencies, like this Commission.”

It must be recalled that NGCP filed a petition with the ERC in November 6 last year, seeking the Commission’s approval on the extension of its mandated listing – as such should have been consummated as early as January 14 this year based on the 10-year prescription under its franchise.

In its franchise law, it was stipulated that NGCP “is required to list and make a public offering of its shares representing at least 20% of its outstanding capital stock or a higher percentage that may hereafter be provided by law, within 10 years from the commencement of its operations or until January 14, 2019.” NGCP took over the operations and management of the country’s transmission assets on January 15, 2009 after firming up its 25-year concession deal with PSALM for the privatized assets.

Nevertheless, NGCP contended that there are several relevant reasons why it cannot pursue yet its stocks listing as prescribed January this year.
For one, it noted the pending arbitration case it filed against TransCo and PSALM before the Singapore International Arbitration Center relative to the advancement of concession fees in 2013.

The other reasons, NGCP cited, had been the delayed decision of the ERC on its next regulatory reset or the subsequent phase of its tariff-setting process; and that the timeframe for its IPO compliance is being deemed to be “merely directory”; and that the timing of public offering is to the discretion of the NGCP’s board of directors.