ERC hears Bukidnon electric co-ops’ bid to buy transmission lines

By Walter I. Balane | Tuesday| November 22, 2011 

MARAMAG, Bukidnon (MindaNews/21 November) — The Energy Regulatory Commission (ERC) has started the hearings last week on the application by the consortium of the province’s two electric cooperatives to buy sub-transmission lines from the National Transmission Corporation (Transco).

ERC hearing officer Roviel Masigan presided over the jurisdictional hearing Thursday for the lease-purchase agreement between the Transco and the Bukidnon Sub-transmission Corporation, a consortium between the First Bukidnon Electric Cooperative (Fibeco) and the Bukidnon Second Electric Cooperative (Buseco).

Renato Cortezano, Fibeco general manager said the hearing served as “expository presentation, pre-trial conference, and evidentiary hearing” for BSTC’s application to buy the three Transco 69-kilovolt (kv) sub-transmission lines in Bukidnon, namely; the Tagoloan (Natumulan)-Buseco 69 kV line, Kibawe-Maramag-Aglayan Fibeco 69 kV line, and the Maramag-Pulangi lateral line.

Cortezano said the consortium eyes to protect Bukidnon electric power consumers from possible skyrocketing of rates once private power firms from outside the province take control of sub-transmission lines.

But he admitted there is no guarantee that the cost of transmission, which is 30 percent of the total power bill, will not go up even with the consortium’s control of sub-transmission lines.

Transco and the consortium filed the application to buy the P59.4-million worth of sub-transmission assets from Transco covered by a lease-purchase agreement before the ERC, on September 20, 2011, according to Transco.

Section 8 of Republic Act 9136 or the Electric Power Industry Reform Act (EPIRA) provides that Transco shall transfer its sub-transmission assets and facilities to qualified distribution utilities.

This provision, according to Transco, enables them and the NGCP “to focus their resources and efforts on improving transmission grid” and “to save maintenance and operating costs.” But Transco added that the BSTC will take charge of the operation, maintenance, upgrade and expansion of the sub-transmission assets.

In the hearing attended mostly by officials, employees and members of Fibeco and Buseco, Transco and BSTC officials presented their application documents to the ERC team headed by Masigan.

Transco said the identified assets met the ERC criteria for sub-transmission assets, and BSTC meets the technical criteria required under ERC guidelines, and Transco management waiver on Electric Cooperatives’ Compliance to financial ratios based on ERC Resolution No. 1 series of 2009.

Transco also certified that the proposed sale satisfies all requirements and criteria set by the Epira as well as ERC and Transco guidelines.

It added that upon ERC’s approval of the sale and upon BSTC’s full payment of the contract price, the parties will execute a deed of absolute sale.

Cortezano said both electric cooperatives obtained loans of P30 million each to pay the assets.

The amortization of the loans, he said, would be taken from BSTC’s collection of the sub-transmission cost.

He said there was no opposition to the proposal during the hearing except for a question on its legality from Oliver Aldovino, a member of the Buseco board of directors.

But Aldovino clarified to this reporter that his question on the legality of the two non-stock, non-profit cooperatives to operate a stock corporation should be taken as an opposition.

He said Buseco’s by-laws provides for the non-profit nature of its operation.

“The BSTC as a corporation cannot be non-profit,” Aldovino added. He cited as questionable the organization of the Bukidnon Electric Consumers Foundation (Beco) as a tandem to the consortium.

He clarified, however, that he is not against the operation of the BSTC but that it has to be done legally by amending the by-laws.

He added that aside from the P59.4-million loan for the purchase, the consortium has to source out funds for the interconnection of the two cooperatives’ sub-transmission lines.

Cortezano said they need to interconnect to improve reliability of power connection.

He said their main reason for the proposal was not profit but to protect the consumers.

ERC’s Masigan asked Aldovino to submit a written manifestation of his position not later than 20 days after the hearing.

Aside from the planned purchase, Fibeco, has also proposed the construction of the Pulangi V hydroelectric power plant in southern Bukidnon and North Cotabato (Walter I. Balane/MindaNews)