NGCP eyes power facilities as transmission assets

By Donnabelle L. Gatdula (The Philippine Star) Updated October 19, 2011 12:00 AM


MANILA, Philippines - The National Grid Corp. of the Philippines (NGCP), the private concessionaire of the country’s power transmission highway, is looking at acquiring power facilities that have been classified as transmission assets.


Cynthia Y. Manrique, head of NGCP’s Revenue and Regulatory Affairs Department, said this move would enable the company to better manage and uphold the security and integrity of the nationwide power grid.


This is in light of an Energy Regulatory Commission (ERC) resolution adopting amended rules on the definition and boundaries of connection assets for the customers of NGCP.


“The ERC’s resolution provided clarification on what is considered a transmission asset,” she said.


“This gave NGCP cause to assess the existing assets on the grid, and determine whether all the essential and crucial assets performing vital transmission functions were within in its operational control and maintenance,” she added.


“Acquisition by NGCP of the transmission assets currently under the control of other entities will revert the operation and maintenance of the same to NGCP, enabling it to better discharge its mandate under EPIRA and its franchise of managing and upholding the security and integrity of the nationwide power grid,” Manrique said.


The Electric Power Industry Reform Act (EPIRA) mandates that NGCP, as TransCo’s concessionaire, be solely responsible for the improvement, expansion, operation, and/or maintenance of the nation’s transmission assets. It is the only entity which possesses the required technical expertise to maintain and operate the nationwide power grid.


NGCP, in particular, recently filed an application with the ERC to seek approval of its capital expenditure for the acquisition of several such assets, including those under the control of Panay Energy Development Corp. (PEDC).


PEDC, a generation company, is connected and currently supplying power to the grid through NGCP’s Sta. Barbara substation.


Among PEDC’s transmission assets are a switchyard, transformers, power circuit breakers, transmission line, SCADA and microwave system, and the lot where the switchyard is constructed.


Manrique said once NGCP has acquired the assets, “the capital expenditure recovery cost of the assets will be carved out from PEDC’s rate and then included in NGCP’s rate.”


Overall, she said the impact will be even lower tariff for all Visayas grid users because the cost (to be collected by NGCP) will be shared by the entire grid, not just the power consumers of Panay.


“It’s not an issue of asset acquisition for its sake. NGCP merely wants to faithfully discharge its mandate under the EPIRA. And we cannot do that unless all assets performing transmission functions are under our operational control and maintenance. We are only complying with the dictates of the EPIRA and ERC Besides, all this will fall under the strict scrutiny of the ERC,” Manrique added.


NGCP has also filed similar applications with the ERC for the acquisition of transmission assets currently owned, operated and maintained by the Cebu Energy Development Corp. (CEDC), Visayan Electric Co. (VECO) and Meralco.