Meralco says asset sale guidelines will impair talks with Transco

The Manila Electric Co. (Meralco) said yesterday that the guidelines on the sale of sub-transmission assets (STAs) will impair its ongoing talks with the National Transmission Corp. (Transco).

In its comments submitted to the Energy Regulatory Commission (ERC), Meralco expressed concern about the agency’s classification of STAs and transmission assets.

"The proposed voltage threshold disregards the negotiations being undertaken by the Transco and Meralco. Both parties have already recognized some 115-kilovolt (kV) and 69-kV facilities which are to be included in the sale," Meralco said.

Previously, ERC issued the guidelines on the sale of Transco’s STAs.

ERC identified as transmission assets as those with rated voltage of 69kV and above, while STAs are those with a rated voltage below 69 kV.

ERC chairman Manuel Sanchez said RA 9136 or the Electric Power Industry Reform Act of 2001 identified the standard for the assets to be sold.

"The EPIRA is very clear about that," he said, although he did not specify where in the power bill states only the 69 kV STAs will be considered for disposal.

Transco president Allan Ortiz said, however, that ERC’s classification limits the participation of distribution firms, especially those intending to acquire more assets.

Meralco has earmarked P4.1 billion to bid for STAs and substations of Transco that are covered by its franchise area.

But Sanchez insisted that ERC’s classification encourages more investors to acquire STAs.

Ortiz pointed out that the STAs falling under the 69 kV and below threshold amount to only P60 million.

On the other hand, Meralco said it should be able to have the flexibility to construct and use facilities of distribution voltages equal to or higher than 69 kV if necessary.

"This is required for purposes of system reliability, system flexibility, and to meet customer requirements. As such, the guidelines should be clear that distribution utilities would not be limited on the choice of voltages," Meralco said.

Other power distributors that are interested in acquiring Transco’s STAs are the Cagayan Power Electric Co., Davao Electric and other big electric cooperatives.

Meralco said previously that it intended to buy P1.1-billion worth of STAs of Transco in Cavite, Batangas, Laguna and Bulacan.

Subsequently, it became interested in a number of Transco’s sub-station assets such as those below 230 kV and raised its allocation to P4.1 billion which is about 80 percent of the P5 -billion STAs of Transco being lined up for sale.