Govt readies review of NGCP concession

by Alena Mae S. Flores – February 01, 2017 at 09:15 pm

from Manila Standard today

The newly-appointed president of National Transmission Corp. wants to review the government’s concession agreement with National Grid Corp. of the Philippines in a bid to create a stronger and smarter power grid and generate additional earnings to the government.

“We have to review the concession agreement or the franchise agreement of NGCP so that we (can) take a closer look of compliance if it’s being done religiously… We have to ensure the development of our transmission grids so that it will be significant to the national development of the agenda of President Duterte,” Transco president  Melvin Matibag told reporters.

National Grid operates the country’s transmission network under a 25-year concession agreement signed in 2009. National Grid offered $3.95 billion for the TransCo concession when it was auctioned in 2007.

National Grid under Republic Act 9511 obtained the franchise to operate, maintain, manage and to engage in the business of conveying or transmitting electricity through a high-voltage backbone system or interconnected transmission lines.

The consortium is comprised of Monte Oro Grid Resources Corp. led by Henry Sy Jr., Calaca High Power Corp. led by Robert Coyiuto Jr., and State Grid Corp. of China as technical partner.

Matibag said the review would determine if the concession agreement was serving its purpose and how it could further help the government and the public.

National Grid welcomed the appointment of Matibag and vowed to work with him to further improve the grid.

“We are eager to show the progress and developments to the grid accomplished by NGCP since take over in 2009,” the company said.

Matibag, meanwhile, said he the review might also show how government couldlower electricity costs.

“In addition to that, we will try to look into the possibility of the other uses of the grid… so that it can also somehow help in lowering costs (of electricity),” Matibag said.

He said under the concession agreement, “if there is any related business that is not necessarily transmission, which can be used by the concessionaire, whatever earnings they will get from that should be used to lower the electricity rates.”

He added a possible non-transmission related business could be the use of fiber optics for communications or internet.

“Systems loss also, we have to check it so we can help consumer to lower electricity rate,” he said.

Matibag said he would push for a smarter power grid that could accommodate new technologies, the entry of renewable energy and climate change.