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