Guidelines on sale of Transco assets OK’d

The Energy Regulatory Commission (ERC) approved yesterday the guidelines governing the disposal of the National Transmission Corp’s (Transco’s) sub-transmission assets (STAs).

"We will publish it in major dailies after which Transco could start selling the STAs," ERC chairman Manuel Sanchez said.

Sanchez said they will work hand-in-hand with Transco on how to dispose of these assets. " We will have to be informed of the selling mode. ERC should be consulted on anything that will affect the rates that will be passed on to consumers," he said.

The ERC official said the guidelines will assist Transco in disposing its STAs.

Based on the approved guidelines, the transmission voltage level shall be determined on an asset-specific basis following the appropriate application of the technical and functional criteria in Sec. 2 of the Electric Power Industry Reform Act (EPIRA).

The assets shall be classified based on technical and functional criteria in Sec. 4, 5, 6 and Rule 6 Part of II of the implementing rules and regulations of the Act, including but not necessarily limited to, the following: directly connected generators, directly-connected end-users and directly-connected load-end substation.

The technical capability criteria for qualification shall include a one year experience in operation and maintenance of a line voltage level equipment of STAs to be acquired. Distribution Utilities (DUs) without experience should undergo at least a month of training program with Transco at their own expense. The DUs should also have two years experience in operating and maintenance of sub-station facilities and should have a weighted average of not more than 80 percent of reliability performance for the most current year (interruption frequency rate 50 percent and cumulative interruption of 50 percent).

The financial capability criteria for qualification shall include but not limited, to the following, based on most current audited financial statement

The DUs should be current on all financial obligations related to all contracts with suppliers of inputs necessary for the DUs provision of electricity service to its end-users; current on all financial obligations related to outstanding debt provided that the ERC may grant exceptions in the case of pending debt restructuring; at least a financial current ratio of 0.80:1 or a quick ratio of 0.70:1; a debt ratio not more than 60 percent debt-ratio shall be calculated as the ratio of total liabilities to total assets; average collection period of not more than 60 percent and a positive net profit margin and return on assets.

Manila Electric Co. (Meralco) and the Philippine Electric Power Plant Owners Association (PEPOA) have expressed interest in the bidding of the STAs. Meralco said it will allot some P4.1 billion for the purchase of some 21 sub-transmission lines and 17 sub-stations within its franchise areas in Luzon, including Metro Manila.