NGCP assures China’s stake in PH power grid ‘not a cause for concern’

Published November 27, 2019, 12:00 AM

by manilabulletin_admin

The National Grid Corporation of the Philippines (NGCP) has allayed fears that China might have the capability to remotely shutdown the Philippines’ power infrastructure.

NGCP NEW-Logo_july6,2018

“There is nothing to be alarmed about the stake by the State Grid Corporation of China (SGCC) in NGCP as its investment is limited only to being a technical adviser,” said NGCP president and chief executive officer Anthony L. Almeda in a press statement issued yesterday.

SGCC has 40% stake in NGCP with the controlling 60% still belongs to Filipino companies, Monte Oro Grid Resources Corporation and Calaca High Power Corporation with 30% shares each. As such, SGCC has only three (3) nominees who sit as members of the NGCP Board of Directors representing the company and proportionate to its capital shares.

“SGCC serves only as the technical adviser of the consortium, but the management and the control of NGCP, including its Systems Operation, are exclusively exercised by Filipinos,” Almeda averred.

He added that the Supervisory Control and Data Acquisition (SCADA), the system that controls the grid, is operated only by authorized Filipino technical experts of NGCP.

“By default, SCADA is disconnected from the Virtual Private Network (VPN); thus, remote users cannot connect to SCADA,” Almeda said, pointing out that “VPN access may only be granted to the Filipino CEO in an emergency situation and only after undergoing a secure and confidential approval process.”

Since NGCP commenced its operations in 2009, the approval process for the VPN access has not been invoked and no remote access has been granted.

Almeda noted that its Systems Operation (SO) Datacenter is equipped with biometric access controls which allow only authorized NGCP personnel to enter apart from the SCADA workstations and servers that have been secured by firewalls and layers of authentication systems to block unauthorized access.

To further allay fears of China’s interference in the Philippine power grid, he suggested a visit by legislators and an independent party to NGCP facilities and personally see how the power grid are managed and operated.

“We are happy to welcome our senators and congressmen as well as an independent third party to visit our facilities in order to dispel any security concerns that had been raised these past few days,” the NGCP executive said.

Sometime in August 2017, Energy Secretary Alfonso Cusi had already inspected the NGCP facilities, and during the previous administration some congressmen also paid a visit of the same facilities.

Almeda also said that it has not entered into other businesses, other than those permitted under the Concession Agreement.

Telecommunication companies like Globe and Smart use NGCP facilities via co-location agreements. A co-location agreement with NGCP allows a third-party to piggy-back with its right-of-way or existing facilities except tapping into or using the transmission service provider’s fiber optic cables.

The co-location agreements, including those inherited from Transco, allow these companies to perform only antenna and joint pole attachment, and installation of equipment.

“NGCP declares all earnings from related businesses and uses the same to lower transmission rates in full compliance with the provisions of EPIRA and Concession Agreement,” he said.

NGCP, a privately-owned corporation created on January 15, 2009 through Republic Act 9511, is a consortium of three corporations – the Monte Oro Grid Resources Corporation, the Calaca High Power Corporation, and the State Grid Corporation of China.

It has the exclusive right to manage and operate the country’s transmission system until 2033.

More than 5,000 Filipinos are currently employed with the NGCP manning the facilities all over the country to ensure the continued and efficient management of the Philippine power grid.

Since 2009 when NGCP took over in the operations and management of the national transmission system, the average transmission rates have dramatically gone down from 79 centavos per kilowatt hour (₱0.79/kWh) to 56 centavos per kilowatt-hour (₱0.56/kWh) in 2018.

Recently, NGCP announced that it has set aside ₱463 billion in fresh capital for the modernization and expansion of the power grid in the next 10 years. It brings its total investment to ₱651 billion from ₱188 billion in the past 10 years of linking power generators and distribution utilities to deliver electricity through the network of interconnected transmission towers and substations.