Published September 5, 2017, 10:00
PM By Myrna
M. Velasco
A provisional approval has been
granted by the Energy Regulatory Commission (ERC) on the implementation of the
P51.696-billion Visayas-Mindanao (VisMin) power grid interconnection project of
the National Grid Corporation of the Philippines.
The power grids will be linked with
converter stations via Sibonga in Cebu in the Visayas to Aurora, Zamboanga del
Sur in Mindanao.
The interconnection, as stipulated
in the regulatory approval, shall be completed in 46 months or within the
durations of 3 years and 8 months.
As previously indicated by NGCP, it
intends to complete the project by year 2020 or at least two years ahead of the
prescribed 2022 timeline of the government as sounded off by the Department of
Energy.
In its ruling, the ERC has
emphasized that “the Visayas-Mindanao interconnection project is in support of
the government’s vision to interconnect the major grids into a single national
grid which is expected to help improve the overall power supply,” since it
enables the sharing of power resources across grids.
ERC Officer-in-Charge Alfredo J. Non
expounded that “the provisional approval granted to NGCP to implement the
Visayas-Mindanao Interconnection Project will enable power supply importations
among the Luzon, Visayas and Mindanao grids.”
In particular, he noted that “the
deficiency of supply in Visayas may be supplied by importing from Luzon or
Mindanao, hence, this Visayas-Mindanao interconnection will help address the
insufficient power supply and will also help optimize the available power
supply in the Philippine grid.”
The ERC prescribed that in the
project’s enforcement, it shall “be subject to optimization based on its actual
use and/or implementation during the reset process for the next regulatory
period.”
On the determination of NGCP’s
wheeling rates under performance-based rate (PBR) regulation, the ERC is still
currently finalizing some adjustments on the formula for calculation of maximum
allowable revenue (MAR) of the company. That sets the basis for the pass-on
cost to electricity consumers.
Additionally, the ERC will be
requiring NGCP “to conduct competitive bidding for the purchase of major
materials in the implementation of the project.”
The transmission concession-firm
previously noted that the P52 billion project funding is the current estimate,
but the cost may still go down depending on the engineering, procurement and
construction (EPC) contract that it will eventually corner.
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