TransCo sees P1B from sale of assets

The government will earn over P1 billion once all contracts with distribution utilities on the sale of the sub-transmission assets (STAs) of the National Transmission Corp. (TransCo) are approved by the Energy Regulatory Commission (ERC), a ranking TransCo official said.

TransCo president Alan T. Ortiz said since 2004, TransCo has already sold five STAs. The sale contracts still need ERC approval before full payments are made.

So far, only one divestment contract, San Fernando Electric Light and Power Corp. (SFELAPCO), has been affirmed by the ERC.

Ortiz, however, believed that the approval of SFELAPCO’s contract would signal ERC’s commitment to approve the other contracts.

"This is a significant development and we thank ERC for being cognizant of the distribution utilities’ welfare. All the other distribution utilities that we have signed contracts with surely welcome this also," he said.

Ortiz also said the successful divestment of TransCo’s sub-transmission assets is a "win-win arrangement" for all. 

"The transfer of ownership and control of these assets will enable distribution utilities to further expand their operations, serve more customers, and improve delivery of service. On the other hand, proceeds of the sale will be part of government revenues, and TransCo will be more focused on maintenance and expansion of transmission lines," he said.

Included in the contracts pending with the ERC are those with South Cotabato II Electric Cooperative (SOCOTECO II), Visayan Electric Co. (VECO), Negros Occidental Electric Cooperative (NOCECO), Cotabato Electric Cooperative (COTELCO), and SBMA/Subic Enerzone.

Signed on Jan. 7, 2004, the P12.92-million deal with SFELAPCO, was the first divestment contract between TransCo and a distribution utility.  

The contract involves the sale of TransCo’s sub-transmission assets in the province of Pampanga particularly the Mexico-SFELPCO line, Mexico-SMC line, and Mexico-Elegant line, all rated at 69 kilovolts.  The lines’ total length is 12.76 circuit-kilometers.

The divestment of TransCo’s sub-transmission assets is part of the energy industry reforms mandated by the Electric Power Industry Reform Act of 2001 (EPIRA).