Business Mirror
TUESDAY, 18 OCTOBER 2011 20:42 PAUL ANTHONY A. ISLA / REPORTER
THE National Grid Corp. of the Philippines (NGCP), the country’s sole power lines concessionaire, plans to acquire power facilities that have been classified as transmission assets in a bid to better manage and uphold the security and integrity of the nationwide power grid as mandated by the Electric Power Industry Reform Act (Epira).
NGCP, in a statement issued on Tuesday, said the Energy Regulatory Commission (ERC) issued ERC Resolution 16, which adopts amended rules on the definition and boundaries of connection assets for NGCP customers.
“The said resolution provided clarification on what is considered a transmission asset,” Cynthia Manrique, NGCP revenue and regulatory affairs department head, said adding that it 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 its operational control and maintenance.
Manrique said NGCP’s acquisition 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.
Section 21 of Epira mandates NGCP, as the National Transmission Corp.’s (Transco) 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, Supervisory Control and Data Acquisition and microwave system, and the lot where the switchyard was constructed.
Once NGCP acquired the assets, Manrique said the capital expenditure recovery cost of the assets will be carved out from Pedc’s rate and then included in NGCP’s rate.
“Overall, 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,” Manrique explained.
She added that it’s not an issue of asset acquisition for its sake but faithfully discharging 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 Resolution 16. Besides, all this will fall under the strict scrutiny of the ERC,” she said.
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., Visayan Electric Co. and the Manila Electric Co.
NGCP said it is also evaluating the other assets across the country owned by other entities that may also be performing transmission function, and thus need to be transferred to NGCP, as well.
Under its Concession Agreement with Transco and the Power Sector Assets and Liabilities Management Corp., all transmission assets acquired by NGCP during the concession period shall be turned-over to the government at the end of the concession period.
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