NGCP to comply with ERC directive for maiden offer
BY LENIE LECTURA – MAY 20, 2021
from Business Mirror
The National Grid Corporation of the Philippines (NGCP) said Thursday that it would comply with the regulator’s directive to complete the requirements for its initial public offering (IPO) and pursue its maiden offering in 6 months.
“We will fully comply with the ERC [Energy Regulatory Commission] order. This IPO is part of our franchise and we have been preparing for this. In accordance with the ruling, we will comply with giving (ERC) monthly updates and we are mindful of the six months deadline,” said NGCP Spokesperson Cynthia Alabanza during a virtual press briefing.
According to the 14-page ERC order, the agency has verified that NGCP’s application for approval of its Registration Statement with the Securities and Exchange Commission (SEC) and Listing with the Philippine Stock Exchange (PSE) will be filed in June this year, while approvals from the SEC and PSE are expected to be issued towards the end of August.
“It can be deduced that NGCP has, in fact, started complying with the IPO requirement and only needs to complete the process.
NGCP is hereby directed to complete its compliance with the IPO requirements until the successful listing thereof within six months from receipt of this order,” the ERC order, which was promulgated last May 14, stated.
The ERC also directed NGCP to submit a compliance report on its public listing activities on or before the 5th day of every month.
NGCP is to list at least 20 percent of its outstanding capital stock within 10 years from the commencement of its operations. Per NGCP’s 2019 audited financial statement, its outstanding capital stock is 2 billion valued at P1 apiece.
The value of the total shares to be listed is expected to reach $1 billion, according to BDO Capital President Eduardo Francisco, who testified for the grid operator during the ERC hearings.
NGCP has tapped BDO Capital as its financial adviser in the IPO process.
Meanwhile, NGCP said it continues to improve the overall performance of the transmission grid since taking over as the country’s sole transmission service provider in 2009.
Among the key indicators in which it continues to outperform is the Frequency of Tripping (FOT), which measures the number of times high-voltage transmission lines tripped or experienced forced outages for every 100 circuit kilometers (ckm).
NGCP’s 2020 performance shows a significant decrease in tripping incidents across all 3 major island grids. In Luzon, the number has gone down significantly from 3.985 in 2008 to 0.932 in 2020, marking a 76.6-percent decrease in tripping incidents. Visayas recorded 4.542 to 0.335, a decrease of 92.6 percent. For Mindanao, the number went from 7.951 to 0.504, a decrease of 93.6 percent.
“The FOT is the most tangible proof of our performance felt by end-users. Our improved numbers are attributed to the continuous improvement and upgrading projects such as wood pole replacement, substation additions, capacitor bank projects, and new transmission lines, effectively reinforcing the stability and reliability of the grid in any condition,” it said in a statement.
NGCP said it also improved the capability of the grid to mitigate the impact of power interruptions to overall grid operations, which are measured by the System Availability (SA) indicator and System Interruption Severity Index (SISI).
In 2020, Luzon’s SA scored 99.208 percent, Visayas at 99.764 percent, and Mindanao at 99.736 percent. For the SISI, Luzon only recorded 0.869 system minutes of interruptions in 2020 compared to 9.537 in 2008; 10.010 from 83.559 in Visayas; and 9.124 from 10.434 in Mindanao.
All three grids have significantly reduced, if not completely eliminated, violations on frequency and voltage limits. The Luzon grid in particular reported 100 percent, or no violations in frequency limit compliance (FLC) since 2010. FLC refers to the percentage of time where the system frequency is within the allowable range of 60 ± 0.3 Hertz, which is the optimal operating frequency of the transmission system.
“We are pleased to report that since NGCP commenced operations in 2009, we have continuously performed over and above our targets year-on-year. This is a result of the company’s relentless efforts to continuously upgrade, expand, and improve transmission facilities. We assure our stakeholders that our ongoing projects and programs seek only to further improve our services,” the company said.
NGCP’s performance indicator ratings are the basis of its incentives, as indicated in the Performance Incentive Scheme (PIS) which is approved every regulatory period and monitored by the ERC.
NGCP is a Filipino-led, privately owned company in charge of operating, maintaining, and developing the country’s power grid, led by majority shareholders and Vice Chairman of the Board Henry Sy Jr. and Co-Vice Chairman Robert Coyiuto Jr.
