Unified power grid gets regulatory approval

Manila Times.net
Published : Friday, October 21, 2011 00:00 Written by : EUAN PAULO C. AÑONUEVO


REGULATORS have given the National Grid Corp. of the Philippines (NGCP) the green light to pursue the interconnection of the country’s three main grids.


In a 14-page decision, the Energy Regulatory Commission (ERC) said that it approved the first phase of the P24 billion Leyte-Mindanao Interconnection Project (LMIP).


“The approval of the LMIP-Phase I will redound to the benefit of NGCP’s consumers in terms of continuous, reliable and efficient power supply as mandated by Republic Act 9136 or the Electric Power Industry Reform Act of 2001,” the regulator said.


Based on NGCP’s petition before the ERC, it would need P92 million for the first phase of the project to update the past studies.


The LMIP seeks to connect the Visayas and Mindanao grids via 23 kilometers of submarine cables. At present only Luzon and the Visayas grid are connected, allowing the two island groups to share their power reserves in case it is needed.


In approving the first phase of the project, the ERC said that pursuing a single grid system in the country would optimize the operations of hydroelectric power plants in Mindanao and power reserves across the country; allow the grid to exchange energy among the three island groups during periods of shortfall or surplus of power supply; create a more “open, liberalized and competitive market” for the future; and open up investment opportunities in the power sector.


First conceived by the government almost 30 years ago, the LMIP’s construction was revived recently after NGCP, the private company that took over the operations of the state grid in 2009, asked regulators to allow it to conduct feasibility studies on the project.


NGCP president Henry Sy Jr. said that the company is willing to put in the funds needed to jumpstart the LMIP despite the ERC’s statement that it will only allow grid operator to recover its cost beginning 2016.


NGCP’s feasibility study on the LMIP, he said, could take six months to one year to complete.