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NGCP allays fears over China control of power grid

NGCP allays fears over China control of power grid

MANILA, Philippines — The National Grid Corp. of the Philippines (NGCP) has allayed fears that China’s grid operator might have the capability to remotely shut down the Philippines’ power infrastructure following leaked reports to lawmakers.

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

 SGCC has 40 percent stake in NGCP, while the controlling 60 percent still belongs to Filipino companies Monte Oro Grid Resources Corp. and Calaca High Power Corp. with 30 percent each.

 As such, SGCC has only three 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 said.

 In a report by CNN, an internal report prepared for lawmakers revealed that China controls the Philippine power grid, raising national security concerns to which lawmakers called for an immediate probe.

 In particular, Sen. Sherwin Gatchalian – who chairs the Senate Committee on Energy – filed a resolution, directing his committee to scrutinize the compliance of NGCP on its mandate to safeguard the grid and ensure continuous electricity supply.

 He also called on the Joint Congressional Energy Commission (JCEC) – the country’s primary watchdog in the power sector – to look into the operations of the country’s transmission line to verify whether Filipinos are in charge of its day-to-day management.

 Almeda, however, noted 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 said NGCP’s 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.

 Meanwhile, Almeda also invited legislators and an independent party to visit NGCP facilities and personally see how the power facilities 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,” Almeda said.

Some of the lawmakers who visited NGCP’s system operation facilities include Gatchalian on Aug. 18, 2016, Congresswoman Baby Arenas and Congressman Danilo Suarez on March 21, 2017.

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

 Almeda likewise said that NGCP 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, which allow 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 the National Transmission Corp. (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,” Almeda said.

  Since NGCP took over the operations and management of the national transmission system in 2009, the average transmission rates had dramatically gone down from 79 centavos per kilowatt hour to 56 centavos per kWh in 2018.

 NGCP recently announced that it had set aside P463-billion in fresh capital for the modernization and expansion of the power grid in the next 10 years. It brings its total investment to P651 billion from P188-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.