THE Senate committee on energy yesterday ordered the National Grid Corporation of the Philippines (NGCP) to submit itself to a full government audit amid reports that China controls the power grid and to determine if it can safeguard the grid to ensure continuous supply of electricity in the country.
Sen. Sherwin Gatchalian, committee chair, said the NCGP must allow the Energy Regulatory Commission, Department of Energy, and the National Security Council to conduct a technical and management audit to ensure it is complying with the provisions of the Constitution.
Gatchalian warned he will move for the revocation of the franchise given to the NGCP if it refuses to comply with the full audit.
NGCP is a privately owned corporation in charge of operating, maintaining, and developing the country’s state-owned power grid, an interconnected system that transmits gigawatts of power at thousands of volts from where it is made to where it is needed.
It took over as the country’s power supplier in 2009 under the administration of former president Gloria Arroyo.
“Since 2017 ang DOE ay gusto ng mag-conduct ng technical and management audit pero hindi nila pinapayagan dahil iba raw ang interpretation nila ng law. We will conduct the audit to make sure that they are following the Constitution and we are protected (The DOE had wanted to conduct a technical and management audit as early as 2017 but the NGCP has denied the request since they have a different interpretation of the law. We will conduct the audit to make sure they are following the Constitution),” Gatchalian said after the committee hearing which looked into the operations of the NGCP and national security implications of a possible Chinese ownership and control of the power grid.
Gatchalian said that based on initial findings, the NGCP has allowed a Chinese national to be its chief technical operations officer, instead of a Filipino national, in violation of the Constitution.
On top of this, the senator also noted a possible threat on the stability of the country’s power supply following NGCP’s report that it has encountered at least 100 cyber attacks from hackers in recent months.
“Dapat malaman na rin ito ni President Duterte, kasi siya ang chair ng National Security Council, para makagawa ng hakbang to prevent it. Ang NSC ay dapat mag-conduct din ng audit, ano ang safeguards na ginagawa natin to protect us from hackers (The President should be informed about this because he is the chair of the National Security Council so they can formulate measures to prevent cyber attacks. The NSC should also conduct an audit and come up with safeguards to protect us from hackers),” Gatchalian said.
Energy Secretary Alfonso Cusi backed the conduct of a full audit of the NGCP.
“We are hopeful that this hearing would finally put to rest the pending issues we have with NGCP, so we could finally eliminate doubts on the integrity of the corporation. On the matter of national security, conducting a thorough inspection of the NGCP remains critical to ensuring that the best interests of our consumers are being upheld,” Cusi said.
NGCP president and chief executive officer Anthony Almeda, in a statement, said they are not against the Senate initiative to formulate a national strategy for the security and resiliency of the national grid to strengthen its existing safeguards and protocols for responding to emergencies.
Almeda said the management and control of their system operations are exercised exclusively by Filipino engineers even if some stakes in the company are owned by a Chinese firm.
‘‘Even the specifications of technical equipment sourced from various suppliers were designed by Filipino engineers before purchase orders were made. The fact that a number of these technical equipment were supplied by Chinese entities does not mean that State Grid of China Corp. (SGCC) now exercises control over system operations,’’ he said.
He added that, ‘‘at present, the only Chinese nationals within NGCP are the directors who were elected based on SGCC’s proportionate shareholding in NGCP. All executive and managing officers of NGCP are Filipino citizens. If there had been foreign nationals who were technical advisers in NGCP before, they had secured the necessary authority from the Secretary of Justice.”
Almeda said SGCC’s 40 percent stake in the company is not illegal under the law and defended that it is not against any audit from the government as long as it has proper basis.
‘‘What NGCP cannot accede to is an audit of the system operations and other facilities as demanded by National Transmission Corp., which is a virtual assumption of regulatory authority that the law denies it. The law and the concession agreement are clear that such audit may be ordered only by the Energy Regulatory Commission based on the standards defined in the Philippine Grid Code,’’ he said.
Cynthia Perez-Alabanza, NGCP corporate communications and public affairs department head, said the appointment of a Chinese as the company’s top executive does not violate the Constitution or any existing law in the country. “Meron silang visa at sa aming pananaw, sapat ‘yun at hindi nagba-violate ng Constitution (The Chinese have visas and to our opinion, that is not a violation of the Constitution),” Alabanza said.
“NGCP’s presence in today’s (Monday’s) hearing is an indication of our reality, our good faith and effort to ensure that we, our operations, remain transparent. This transparency has characterized our operations since day one,” she added.
She said the Chinese nationals’ roles in the grid were purely recommendatory in nature and the final decision will have come from the NGCP Board Audit Committee.
Alabanza assured senators that the NGCP is impenetrable by hackers as they religiously undertake measures to prevent cyber attacks.
Gatchalian said the ERC will conduct the audit on power rates, while the DOE will touch on operational matters, including cyber-security matters.
The NGCP has until Feb. 10 to submit all pertinent documents needed for the audit.
Sen. Richard Gordon questioned the presence of Chinese in the executive and managerial positions in the NGCP, specifically why the primary signatories for the Luzon Expansion Project contract in 2011 were Chinese and not Filipinos.
In the copy of the project’s contract presented by Gordon, it showed that a certain Wn Bo signed as technical officer, and Zhou Xiaoan as the country manager. Almeda, who was then chief administrative officer, signed only as a witness.
“Why was it only signed in the presence of Anthony Almeda. Foreigners ang pumirma (Foreigners signed the contract),” Gordon said.
Gordon grilled the NGCP on the use of the NARI Transmission Control Operational Platform system, a remote monitoring and control structure located in China, in running the grid.
The system, he said, enables Chinese engineers to troubleshoot, operate, and control NGCP’s power transmission network.
“Puwede nilang patayin ang grid from China, is that correct? I would be uncomfortable allowing a foreigner to have a connection here. The principal objective is to protect the country on a situation where we will be totally dependent or we do not have control,” Gordon said. – With Jed Macapagal