"We are currently talking with various distribution utilities for the sale of the sub-transmission assets," Transco president and chief executive officer (CEO) Asisclo T. Gonzaga said.
PSALM was created under the Electric Power Industry Reform Act (EIRA) or Republic Act 9136 to take over and dispose of the assets and liabilities of the National Power Corp. (Napocor)
Gonzaga said they are negotiating with Meralco and two other big distribution utilities and electric cooperatives, Tarlac Electric Cooperative and San Fernando, Pampanga Electric.
"Ultimately, we have to divest these sub-transmission assets as mandated under the Electric Power Industry Reform Act (EIRA)," he said.
Under the EIRA, the transmission assets and functions will be transferred to Transco which will be privatized through open competitive bidding or outright sale or concessional contract.
He said Meralco is particularly setting its sights on some sub-transmission assets located in Bulacan and Cavite. "We are in the process of negotiating with Meralco now," Gonzaga said.
He said they will continue to run the sub-transmission assets that will not be disposed of. "We will temporarily hold on to these assets until a distribution utility or electric co-op decides to buy it," he added.
During the transition phase of the restructuring process, Transco will manage the provision of ancillary services to maintain the reliability and security of the grid. Transco will also try to make sure that sufficient ancillary services are arranged, provided and deployed to meet planning and operating standards.
Aside from entering into transmission service agreements with transmission customers, Transco will also negotiate contracts with power generation facilities that are capable of providing ancillary services.