October 22, 2019 | 9:39 pm
THE Energy Regulatory Commission
(ERC) has denied an appeal by two energy agencies to reconsider an earlier ERC
rejection of their motion to intervene in the petition of privately owned
National Grid Corp. of the Philippines (NGCP) to extend the period for its
public listing.
In an order promulgated on Oct. 17,
the ERC said a “careful scrutiny” of the allegations presented by the National
Transmission Corp. (TransCo) and the Power Sector Assets and Liabilities
Management Corp. (PSALM) in their motion for reconsideration “appeared that the
same are rehashed arguments already raised” in various pleadings.
“To begin with, [TransCo and PSALM]
maintained their position that they possess direct and substantial interest in
the instant Petition. They reiterated that being the owners of the transmission
system under Republic Act No. 9136 entitled ‘Electric Power Industry Reform Act
of 2001’ (EPIRA), they have legal standing as intervenors in the instant Petition,”
the ERC said.
“The Commission already addressed
the said matter in its Order dated 25 June 2019. As mentioned by the
Commission, a mere invocation of the EPIRA, which created [TransCo and PSALM],
does not automatically vest them the right to intervene in the instant
proceeding, absent any clear legal standing as required by the rules of the
Commission,” it added.
The ERC said the two failed to show
that they have direct and substantial interest in the proceedings and the outcome.
It said the entirety of the petition for intervention and all other pleadings
filed in relation to the case were “bereft of any allegations showing clear
legal standing.”
NGCP started operations on Jan. 15,
2009 in accordance with RA 9511, the law that granted the company a franchise
to engage in the business of conveying or transmitting electricity through a
high-voltage backbone system of interconnected transmission lines, substations
and related facilities.
Under the law, 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 be provided by law
within 10 years from the start of its operations, or until Jan. 14, 2019.
NGCP was granted the concession to
operate TransCo’s transmission system and the grid by virtue of the concession
agreement dated Feb. 28, 2008 with PSALM and TransCo.
On Nov. 13, 2018, NGCP sought the
ERC’s approval of its proposed extension of the period for listing of its
shares of stock. It cited as grounds the pending arbitration case filed before
the Singapore International Arbitration Centre against PSALM and TransCo on
their concession agreement, among others.
NGCP also said its delayed
regulatory reset as a valid ground for the deferred listing. It said the
listing requirement under Section 8 of RA 9511 “is merely directory.” The
company cited the absence of implementing rules and regulations for compliance
with Section 8, and that the timing of public offering is left to the discretion
of NGCP’s board of directors.
On Dec. 21, 2018, TransCo questioned
the authority and jurisdiction of the ERC over NGCP’s petition, saying that RA
No. 9511 has no provision granting the same to the regulator.
On Feb. 15, TransCo and PSALM said
they were participating in the proceedings by way of special appearance only,
and sought the immediate dismissal of NGCP’s petition for the reason that the
ERC has no jurisdiction to hear and decide the case.
On June 25, the commission denied
TransCo and PSALM’s petition to intervene. They filed a motion for
reconsideration on Aug. 22, and an urgent motion to resolve the same on Sept.
28.
In its denial of the motion for
reconsideration, the ERC said a personal and substantial interest means that a
party will stand to be affected by the act or decree being challenged.
In this case, it said TransCo and
PSALM did not present any proof that they will suffer injury as a result of
NGCP’s observance or non-observance of its franchise law.
The commission said it is undisputed
that NGCP was granted the concession to operate and maintain the nationwide
transmission system. The grant was categorically embodied in the concession
agreement between NGCP and TransCo/PSALM.
However, the concession agreement
was focused on the grant of authority to NGCP to maintain and operate the
transmission facility and other related covenants, it said.
The concession agreement contains no
provision that authorizes either TransCo or PSALM to ensure that NGCP complies
with its franchise law, particularly its public listing obligation, the ERC
said. — Victor V. Saulon
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