NGCP seeks Congress okay to change insurer

MANILA, Philippines - The National Grid Corp. of the Philippines (NGCP), the operator of the country’s power transmission highway, plans to ask Congress to allow it to replace its insurer.

NGCP has been complaining about the poor services being provided to the company by state-run Government Service Insurance System (GSIS).

NGCP spokesperson Cynthia Perez Alabanza said because the NGCP manages and operates facilities that are owned by the government, it is required under the law to obtain insurance for these assets from the GSIS.

“But we need a better package that is more comprehensive and efficient than the present one offered by the GSIS,” she pointed out.

“As I see it, there are two options: either we call on Congress to pass a law that would allow private entities operating public utilities to choose their own insurer, or the GSIS can implement reforms in its reinsurance procedures,” she noted.

One instance where the NGCP had failed to tap its insurance cover under the GSIS was when it occurred losses to its transmission lines and substations due to the heavy rainfall and flooding brought by Typhoons Ondoy and Pepeng in 2009.

The GSIS insurance package also failed to cover losses incurred by the NGCP arising from the sabotage of several transmission towers in Mindanao, also in 2009.

As a result, she said the NGCP filed a petition with the Energy Regulatory Commission (ERC) seeking the recovery of these losses in the form of “force majeure event-pass through” claims that would be charged to power consumers in Luzon and Mindanao.

With this, NGCP said it is just prudent to seek for an overhauling of its insurance policy under GSIS, covering the country’s power transmission assets in a bid to secure a more efficient, cost-effective and responsive package that would allow it to better recoup losses and damages to all its facilities that deliver electricity to industrial, commercial and household consumers nationwide.

In a letter signed by NGCP chief administrative officer Anthony Almeda, the private concessioner explained to the GSIS that the NGCP should be able to effectively and adequately secure insurance claims so it would not incur losses that it eventually has to pass on to electricity consumers in the form of higher power rates.

Being a private corporation, the NGCP also asked the GSIS for an insurance cover that is separate from the package covering the National Power Corp. and the Power Sector Assets and Liabilities Management Corp, which are both state-run firms.