Senator Win Gatchalian urged the Energy Regulatory Commission (ERC) to issue an ultimatum on the National Grid Corporation of the Philippines (NGCP) to comply with the requirement to list its shares of stock, a provision specifically stated in its franchise as the country’s transmission system operator.
The NGCP filed anew for a motion for reconsideration in August appealing for a year to extend the deadline on its compliance in the initial public offering (IPO) requirement after the ERC denied the company’s earlier petition and issued a Decision in April 17 that NGCP should commence immediately the process of public listing and submit a compliance report.
While the ERC has yet to receive comments from the National Transmission Commission (Transco) and the Power Sector Assets and Liabilities Management Corp. (PSALM) on NGCP’s motion for reconsideration, Gatchalian reminded the ERC that such requirement on the two Intervenors lapses on October 31, 2020.
Gatchalian expressed misgivings over NGCP’s inaction on the matter, saying that there’s no showing that the grid operator will comply with the requirement to list its shares of stock.
“The resolution is absolute. Within six months NGCP should be conducting an IPO but I’m very sure that’s not going to happen. So if that will not happen what is the recourse?” Gatchalian asked.
Based on the franchise law, ERC Chairperson Agnes Devanadera said the NGCP has two options to satisfy the IPO requirement of the franchise, one is the public listing and the other is the listing of a holding company.
Given that the franchise imposes obligations on NGCP as the operator of the transmission grid, Gatchalian pointed out that there will be corresponding penalties and fines that could be slapped against the company for failing to comply with the ERC order.
“It’s clear in their franchise that they should be offering its shares to the public,” the senator said, noting that the NGCP’s delay in issuing the IPO has already been two years.
Gatchalian underscored the significance of undertaking an IPO, especially in the case of NGCP which manages the government’s transmission assets.
“I would like to again stress that the system operator should comply and this is part of the governance mechanism to get the public involved. When the public is involved, then there’s more transparency. Shareholders demand accountability,” Gatchalian said.