Meralco acquires TransCo assets worth P520 M

MANILA, Philippines - Manila Electric Co. (Meralco) has acquired more than P520 million worth of sub-transmission assets (STAs) of the state-owned National Transmission Corp. (TransCo).

In a statement Meralco said it signed Monday a number of contracts/agreements for the acquisition of all of the remaining STAs of TransCo within Meralco’s franchise area.

Meralco said the acquisition is in compliance with an Energy Regulatory Commission (ERC)resolution, which set the deadline for the acquisition of residual STAs on or before Dec. 31, 2011.

The acquisition was part of the Electric Power Industry Reform Act (EPIRA) process wherein the transmission company will divest of its STAs to the distribution utilities (DUs), in recognition of the franchise rights of DUs.

There were two STA batches included in the new contracts. Batch 4 STAs includes assets that would be acquired solely by Meralco – the Dasma-Rosario 115-kv line, Rosario Substation, Tayabas Substation, and Ternate Substation. This transaction amounted to P381 million.

The other STAs (Batch 5) would be acquired through a consortium among Meralco and two other DUs – Second Batangas Electric Cooperative (Batelec II) and First Bay Power Corp. (FBPC).

As such, three consortium agreements were executed Meralco - Batelec II -FBPC; Meralco - FBPC; and Meralco - Batelec II. The total cost that the consortia, the first of its kind in the Luzon grid, would be paying Transco for the STAs is about P142 million.

These contracts and agreements would be filed for approval before the ERC.

The transfer of the STAs from Transco would pave the way for Meralco and the other DUs to assume full control of the operation, maintenance, upgrading

and expansion of the subject STAs and would translate to a more efficient and reliable service to customers served by it.