by Myrna Velasco September
30, 2016
The bid of the National
Grid Corporation of the Philippines (NGCP) to re-classify the Salong-Calaca 230
kiloVolt (kV) line connection facility and the New Salong substation into “transmission
facilities” has secured the approval of the Energy Regulatory Commission (ERC).
The power industry
regulator has qualified that since the assets no longer just serve one
customer, their re-classification into “transmission assets” and transfer into
the charge of NGCP have already been warranted.
“Based on the documents
submitted, the Commission finds merit in the proposed reclassification of the
Salong-Calaca 230kV line. Thus, the subject asset should be classified as
transmission assets,” ERC has noted.
Further, the regulatory
body has reckoned that “the New Salong 230kV switching station remains to be a
transmission asset since it was designed and constructed to operate and
function as a transmission asset from the start.”
The preliminary functional
criteria set for the Salong-Calaca line had been as a connection asset to
service the needs of Steel Asia Manufacturing Corporation (SAMC); while the New
Salong switching station was intended for the load of the South Luzon Thermal
Energy Corporation (SLTEC) coal plant.
In the ERC ruling,
however, it prescribed that its go-signal is just limited to the
re-classification of the assets and will not include yet the plea of the
parties for drawing up the “fair market valuation” of the assets.
“It is premature to
raise the issue on the fair market value considering that the petition on hand
is for the reclassification of the subject assets,” ERC stressed.
The Commission raised
that after the assets’ reclassification, “NGCP and SLTEC would negotiate for
the fair market value of the subject assets and in the event that the parties
disagree, NGCP and SLTEC would file with the Commission a dispute resolution.”
As to the cost recovery
of the New Salong switching station project, it was directed that such shall be
applied for as part of the maximum allowable revenue (MAR) that must be
recouped by NGCP under its 3rd regulatory reset under performance-based
regulation (PBR) scheme.
SLTEC earlier lodged
its intervention on the case, primarily batting “for the reimbursement of NGCP
within the 3rd regulatory period of its cost for developing and constructing
the New Salong switching station, the cost of acquiring the Salong-Calaca 230kV
line from SAMC; and the cost for the rehabilitation, modification, maintenance
and reinforcement of the acquired SAMC transmission line.”
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