NGCP amenable to ERC audit only ‘in accordance with law’

Published March 10, 2020, 10:00 PM By MYRNA M. VELASCO

https://business.mb.com.ph/2020/03/10/ngcp-amenable-to-erc-audit-only-in-accordance-with-law/

Concessionaire firm National Grid Corporation of the Philippines (NGCP) has stood pat on its position that it is amenable to undergo audit of its operations as well as review of its tariff-setting as long as this has to be carried by the Energy Regulatory Commission (ERC), which is the duly designated regulator of the restructured electricity sector.

In a statement that it was scheduled to deliver at the suspended Senate hearing on Tuesday (March 10), NGCP stipulated that it “has always been amenable to a government audit, so long as it is done by the independent quasi-judicial body authorized by law.”

That body, it said, is the ERC because it is the only legally sanctioned entity “that is tasked to promulgate and enforce the Philippine Grid Code,” or the edict that governs the safe and reliable operation, maintenance and development of the national grid.”

In another hearing last month, ERC Chairperson Agnes T. Devanadera has so far sounded off the readiness of the regulatory body to undertake audit of NGCP’s operations within the ambit of its authority as regulator of the power sector.

The ERC chief further indicated they are ready to tap a third party audit team or consultant that will aid them to carry out the process, especially the cyber security aspect that had been raised in the legislative inquiry.

NGCP opined “at the risk of stating the obvious, the ERC is part of government, and the audit by the ERC is the only government prescribed by law,” – primarily the Electric Power Industry Reform Act (EPIRA), which is the policy and regulatory bible of the deregulated power industry.

Given the company’s willingness to subject itself to the required audit, NGCP thus stressed “we cannot understand why TransCo (National Transmission Corporation) and the DOE (Department of Energy) cannot respect the process.”

NGCP argued it “cannot agree to the proposed comprehensive system operations audit demanded by the DOE and TransCo,” noting that TransCo itself has actually been conducting regular periodic inspections already of the substation and transmission assets nationwide.”

Such periodic inspection, NGCP said, was duly prescribed under Section 7.03 of the Concession Agreement which grants PSALM (Power Sector Assets and Liabilities Management Corporation) and TransCo “the right to inspect the transmission assets.” And by far, the next inspection schedule for TransCo is this month.

PSALM, which privatized the country’s transmission assets, is also empowered to carry out audit on the concession firm’s compliance of the concession deal.
NGCP further reiterated ERC’s declaration in the last hearing that “funds have been allocated for a system audit of NGCP.”