THE Senate Committee on Energy on Monday found sufficient grounds to recommend the “review and revocation” of the franchise granted to the National Grid Corp. of the Philippines (NGCP).

The panel also agreed to proceed with the franchise review, should the NGCP fail to subject its operations to the mandatory audit, which it not done since 2017.

“Based on the documents and based sa sagot nila, merong basis tayo (based on the answer we got, there is basis for the action) and this is the violation of the constitution,” Senator Sherwin T. Gatchalian said in a briefing Monday. He noted this will be subject to the validation by the Department of Energy (DoE).

Mr. Gatchalian cited the appointment of foreign nationals to executive or managerial positions, which violates the Constitution.

“Nakita natin na ’yung Chief Technical Officer na siyang may control ng lahat ng grid from Luzon, Visayas, and Mindanao ay nasa isang dayuhan (A single foreign national was made chief technical officer with control over the Luzon, Visayas and Mindanao grids),” Mr. Gatchalian said.

Senator Richard J. Gordon during the hearing presented documents that showed a certain Wen Bo is among the signatories of a 2011 contract, representing the NGCP as its Chief Technical Officer.

The 1987 Constitution, under section 11 of article 12, provided that all “executive and managing officers of such corporations or associations must be citizens of the Philippines.”

The Department of Energy disclosed it has tried over the years to audit the NGCP, but was repeatedly denied. Energy Secretary Alfonso G. Cusi said during the hearing that the audit is necessary to assess the vulnerability of the transmission grid.

Mr. Gatchalian threatened the NGCP with a franchise review if it continues to reject an audit.

“You know well the parameters of your franchise. So in any case, I have a very simple deal for NGCP — allow the inspection or else we will proceed reviewing your franchise because there was clearly a violation of the Constitution. I have a very simple deal,” Mr. Gatchalian said in the hearing.

The NGCP said it is open to the audit, provided that it is conducted by the Energy Regulatory Commission (ERC), as provided under the concession agreement and Republic Act No. 9136 or the Electric Power Industry Reform Act of 2001 (EPIRA).

“We’re open to that (audit) as we’ve always said. But, of course, we want it done under the proper parameters,” NGCP Spokesperson Cynthia P. Alabanza said in a chance interview.

Ms. Alabanza said that when NGCP’s broadband assets were in question, the Department of Information and Communications Technology had been allowed to inspect.

“Now, if they want this thing, we’re going to do it but under the ERC, which is the body tasked to (do) that,” she said.

ERC Chairperson and Chief Executive Officer Agnes VST Devanadera, said the agency is concerned only with matters related to rate-setting and grid security, but noted the terms of reference (ToR) for the NGCP audit are being prepared.

“We cannot be going too far. Our ToR is based on that, but with the discussions now, personally, we may have to remove from the ToR the national grid security or cybersecurity (mandate) because that requires a very special skill,” Ms. Devanadera said in a separate interview.

“So we should probably have two contracts — one for cybersecurity and the usual ToR for the review of the NGCP as a system operator.”

She said the oversight of NGCP “is not the usual grid security that we know of.” She said the cybersecurity aspect contemplated during the Senate hearing require “a very highly specialized” body.

Ms. Devanadera said once the ERC finalizes the ToR for a third-party audit of the NGCP, the commission should be able to tap an entity to perform the review by the first quarter.

She said the new ToR is needed to correct a flaw in the previous practice where the NGCP provides the funds, conducts the bidding, and awards the contract for the review. She said it was only in this year’s budget that ERC was able to obtain funding to procure a third-party auditor of grid operations. She said the financial aspect could be performed by a third-party finance auditor. — Charmaine A. Tadalan

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