NGCP to take part in Meralco asset buy
The Energy Regulatory Commission has allowed the National Grid Corp. of the Philippines (NGCP) to intervene in the plan of power distributor Manila Electric Co. (Meralco) to acquire P381 million worth of government subtransmission assets.
In an order, the ERC said it was “inclined to allow NGCP to participate as an intervenor” in the transaction between Meralco and the National Transmission Corp., which both sought regulatory approval for the sale earlier this year.
According to ERC, the NGCP has a “direct and substantial interest” in the transaction because the cost of the upgrades that NGCP invested on the subtransmission assets was not included in the sale.
NGCP, operator of the country’s transmission network, thus said it must be paid for its investments that gave additional value to the subtransmission assets.
To recall, the NGCP took over the operation of the national transmission network from Transco in 2009, after which it began implementing new and rehabilitation projects to enhance system reliability and maintain the quality of power delivered to electricity users.
Meralco and Transco filed an application early this year for the acquisition of the Dasmariñas-Rosario-Abubot 115-kiloVolt line, the Rosario Subsation and Taybas 115 kV switchyard and Ternate substation equipment.
The agreement governing the sale of these assets was signed in December 2011.
According to Meralco, the “transfer of the subtransmission assets from Transco would translate to a more efficient and reliable service to customers” that it serves.
Under the Electric Power Industry Reform Act, subtransmission assets will be operated and maintained by Transco until their disposal to qualified distribution utilities. These utilities will take over the responsibility of operating, maintaining, upgrading and expanding the grid assets.
Transco’s subtransmission assets are made up of about 6,200 circuit-kilometers, comprising 69 kilovolt transmission lines and 1,600 megavolt amperes of substation capacity. Estimated cost of these assets is P7.6 billion based on 2007 net book values.
