House Panel to Probe NGCP Franchise Over Alleged Inefficiencies

Lawmakers in the House of Representatives have launched a review of the franchise of the National Grid Corporation of the Philippines (NGCP) amid allegations of inefficiency and non-compliance with regulatory requirements.

During a hearing by the House Committee on Legislative Franchises on December 23, 2024, Deputy Speaker David “Jayjay” Suarez filed a motion for a motu proprio inquiry into NGCP’s operations under Republic Act 9511. The motion was unanimously approved.

Allegations of Inefficiency

Suarez raised concerns about NGCP charging customers for delayed projects that they have yet to benefit from. He emphasized, “Filipinos should not be paying for inefficiency. We should be paying for efficiency.”

The inquiry follows recent penalties imposed by the Energy Regulatory Commission (ERC):

• ₱12.3-million fine for delays in 27 capital expenditure projects.
• ₱3.5-million fine in August 2024 for delays in 10 other projects.

Questions on Ownership and Public Float Compliance

Lawmakers also scrutinized NGCP’s ownership structure and its adherence to the required 20% public float. Representative Danilo Fernandez argued that the share swap transaction with Synergy Grid & Development Phils. Inc. (SGP) did not satisfy franchise conditions.

NGCP’s Defense

NGCP spokesperson Cynthia Alabanza defended the company, stating it had followed existing rules. She noted that NGCP has invested five times more than the government in developing the country’s power grid.

“In terms of our obligation to spend and improve the transmission grid, we have done that,” Alabanza said. NGCP also committed to providing written responses to lawmakers’ concerns.

What’s Next?

The review aims to determine whether NGCP has been operating in compliance with its franchise obligations and whether reforms are needed to protect Filipino consumers from paying for unutilized or delayed projects.