TransCo earmarks P15.6B for capex this year

State-owned National Transmission Corp. (TransCo) will spend about P15.6 billion this year for its capital expenditure program.

TransCo president Arthur Aguilar said in a press briefing that the bulk of the budget will be used to fund critical transmission upgrade and modernization projects.

He said they would tap official development assistance (ODA) loans to fund the projects but a portion would also be funded through TransCo’s internally-generated funds.

Among these critical projects are:  a submarine cable project in Visayas, a transmission project in Samar, the Naga transmission line project, San Jose del Monte transmission project, Batangas transmission and reinforcement project, Bicol transmission line upgrade and uprating projects in Negros in Panay.

As this developed, Aguilar said they would convince the Energy Regulatory Commission (ERC) to give more time for the company to dispose of its sub-transmission assets (STAs).

The ERC, the country’s power sector watchdog, has imposed a six-month deadline for the transmission company to sell all its existing STAs.

ERC wants TransCo to facilitate the sale of these STAs to prepare the company from the eventual turnover of the operations of the power  transmission highway to the new concessionaire, the group led by Monte Oro Grid Resources Corp.

Last year, government sold the 25-year concession contract of TransCo, allowing the Monte Oro group to operate the country’s transmission network. Monte Oro offered a bid of $3.95 billion and the group is now in the process of securing the franchise from Congress.

According to Aguilar, they have filed a motion for reconsideration with the ERC as negotiations are still ongoing with distribution utilities (DUs) and electric cooperatives (ECs).

“We are talking with them but the DUs have to be financially capable to purchase the STAs,” the Transco chief said.

TransCo is in a quandary as it could not sell its STAs to DUs and electric cooperatives that are not financially sound.

Last year, TransCo projected that it could only dispose half of its STAs assets.

The STA divestment is still part of TransCo’s efforts to pursue power sector improvements as mandated by the Electric Power Industry Reform Act (EPIRA) of 2001.

The EPIRA provides that the sub-transmission assets shall be disposed to qualified DUs and ECs.

Under the EPIRA, the DUs where the STAs are located will have the sole authority to buy these STAs.

To help solve this dilemma, TransCo came up with a financing program that would enable technically and financially qualified ECs to pay only 20 percent of the selling price upon the approval of the contract by ERC.

The sale of TransCo’s STAs involves 120 sale packages for 107 interested distribution utilities, mostly electric cooperatives.

TransCo’s P8.8 billion worth of STAs nationwide cover 6,900 circuit kilometers of mostly 69-kilovolt lines and 1,600 megavolt-ampere of substation capacity.

TransCo has so far sold P2.5 billion worth of STAs since the divestment program began in 2004.

The ERC has already approved 10 STA sale contracts worth P253.72 million. These involve the sales of STAs to San Fernando Light and Power Electric Corp., Cabanatuan Electric Corp., Angeles Electric Corp., Tarlac Electric Inc., Negros Occidental Electric Coop., Bohol 1 Electric Coop, South Cotabato 1 Electric Coop, Sultan Kudarat Electric Coop., Davao Light and Power Corp. and Misamis Oriental 2 Electric Coop.