13 AUGUST 2012
NGCP reiterates plan to acquire PEDC transmission assets
CONSUMERS in Panay could expect any looming hike in transmission rates of the National Grid Corp. of the Philippines (NGCP) to be offset by the reduction in generation charge with the possible entry of other generators to supply power to Panay Electric Co. Inc. (Peco).
On Monday Cynthia Perez-Alabanza, NGCP spokesman and adviser for external affairs, said in a press conference that while a transmission charge of P1 per kilowatt-hour (kWh) will be billed to consumers, this could be possibly offset by a lower generation charge due to the entry of more generators to provide the power requirements of Peco.
The looming hike due to the transmission charge, according to Alabanza, stems from NGCP’s reiteration to buy the transmission assets of Panay Energy Development Corp. (PEDC) for P620 million.
She said the original cost of recovery for the transmission asset will be carved out of PEDC’s total generation charge billed to Peco customers.
“Once the asset is acquired by NGCP, it will be billed separately as a transmission charge,” said Alabanza while making it clear that the recovery cost will be minimal as it will be spread throughout the entire Visayas grid and not just from Peco customers.
At present, the cost of recovery for the said transmission asset is tucked into generation charge billed to Peco customers, as these assets were built by PEDC along its 164 megawatt (MW) coal-fired power plant in Panay.
Among PEDC’s transmission assets are a switchyard, transformers, power-circuit breakers, transmission line, supervisory control and data acquisition (Scada) and microwave system, and the lot where the switchyard is constructed.
Some groups have opposed NGCP’s planned acquisition, saying that the purchase will be a violation of the Electric Power Industry Reform Act of 2001 (Epira).
Alabanza said NGCP has the legal basis to buy power facilities classified as transmission assets in a move to better manage and uphold the security and integrity of the nationwide power grid at a fair market price the said assets.
“While Section 9 of the Epira allows a generator to own, operate and maintain a dedicated point-to-point limited transmission facility, this is only on the condition that said facility is solely used by the generator to connect to the grid and that it will not be used to connect other users,” Alabanza said.
Distribution utilities and/or other generators and large customers are not allowed to connect to the facility.
Section 21 of the Epira mandates that NGCP, as National Transmission Corp.’s (Transco) concessionaire, is the entity solely responsible for the improvement, expansion, operation and/or maintenance of the nation’s transmission assets.
Alabanza said it is the only entity which possesses the required technical expertise to maintain and operate the nationwide power grid.
Alabanza said no other entity is legally authorized to operate transmission assets, and NGCP is the only company technically competent to do so.
The NGCP earlier filed an application with the Energy Regulatory Commission (ERC) to seek approval of its capital expenditure for the acquisition of power facilities classified as transmission assets, including those under the control of PEDC’s.
Alabanza said PEDC, a generation company, is connected and currently supplying power to the grid through NGCP’s Santa Barbara Substation.
“In the case of the PEDC assets subject of NGCP’s application with the ERC, the assets are not only used to connect PEDC to the grid, but are also used to directly supply power distributor Peco. The assets are also used by another generator Panay Power Corp. Therefore, the facility is not a ‘dedicated point-to-point limited transmission facility’ and must be turned over to NGCP,” Alabanza said.
Read article source in Business Mirror