Maharlika investment in NGCP to help lower power rates – Consing

Metro Manila, Philippines – The government investment in the private power grid operator is a strategic move to reduce electricity costs for consumers, the sovereign wealth fund manager said on Tuesday, Jan. 28.

Maharlika Investment Corp. (MIC) President and CEO Rafael Consing said power sector investments would strengthen the transmission infrastructure, leading to lower rates for consumers.

In a briefing, Consing explained that government involvement in the energy sector would help improve transmission services, ultimately contributing to lower electricity bills.

MIC has secured a 20 percent stake in National Grid Corporation of the Philippines, the sole grid operator.

“The way NGCP can contribute to lower electricity costs is by ensuring the successful rollout of transmission grid infrastructure,” Consing said.

“Once the infrastructure is in place, more power players will be able to connect to the grid, increasing supply. As with any commodity, an increase in supply eventually leads to lower prices for consumers,” he said.

Energy Secretary Raphael Lotilla echoed Consing, stating that transmission constraints often drive up electricity rates.

"As we roll out more of these projects, there will be fewer obstacles to electricity supply," said Lotilla.

"For example, Mindanao, which previously had an 800-megawatt overcapacity, is now able to export 400 megawatts to the Visayas and Luzon, thanks to the completion of key projects," he said.

According to power distributor Meralco, transmission costs account for 10.1 percent of total electricity charges.

Security threats

Consing also addressed NGCP security concerns in light of the 40 percent stake of Chinese government-owned State Grid Corporation of China.

He assured the public that there are no identified security threats.

“At this moment, those threats do not exist,” Consing said. “Our presence in the partnership ensures that we can monitor the situation closely. There is no evidence or allegations of any security risks related to NGCP’s operations.”

Lotilla added that the government stake in NGCP could assure the public of clear-cut company operations.

“There would be greater transparency from the government’s perspective, giving us a better view of NGCP’s activities,” Lotilla said.

“If NGCP insists there is nothing to fear, we’ll be in a better position to confirm that,” he said.