Mindanao grid target connection date set for end-2020

THE National Grid Corp. of the Philippines (NGCP) has set a target to connect the Mindanao grid to the grids in Luzon and the Visayas by December 2020, in a P52-billion project that it described as the biggest in its history.

“If we have everything done, then [December] 2020 deadline should not be a problem,” said Cynthia P. Alabanza, NGCP spokesperson, as she appealed for support from both the local and national governments to speed up the permitting process.

Ms. Alabanza said NGCP has just finished an initial survey and has yet to come with cost estimates, although she said a rough estimate should be around P52 billion “but most likely will go up.”

“We want to comply with the direction of the current administration and we are doing everything to align our program with the program of the government,” she said during a briefing at the NGCP office on Wednesday.

Redi Allan B. Remoroza, head of NGCP’s transmission planning department, said the interconnection of Mindanao to Visayas will start from a new substation in Dipolog City, in Zamboanga del Norte, which will then traverse a 102 kilometer overhead route before going via submarine cable to the southern tip of Cebu island.

A 112-kilometer transmission line will then carry the electricity to another substation in Naga in Cebu. A line from Naga to Ormoc already exists. The two lines in the two phases of interconnection will each be capable of carrying 450 megawatts (MW) of power.

“This was initially designed to address the deficiency in Mindanao but now it’s really to enable the transfer of power among the grids,” Ms. Alabanza said.

NGCP’s briefing comes after the top official of National Transmission Corp. (TransCo) told reporters that the agency was planning to review the congressional franchise granted to the grid operator.

“We have to look at [the concession agreement] whether it has served its purpose,” said Melvin A. Matibag, TransCo president and chief executive officer.

Mr. Matibag, whose appointment was announced by the Department of Energy (DoE) on Tuesday, said the review would involve looking at the legalities of the concession agreement with NGCP.

He said his office could use the “material findings” from an audit conducted under the previous administration as a starting point for the review.

Undersecretary Felix William B. Fuentebella described Mr. Matibag’s appointment as timely “because we are revising the transmission development plan.”

He said he will also check whether NGCP’s commitments under the agreement were done on time, citing as example the connectivity of the Mindanao grid to the Luzon and Visayas grids.

Asked about when he wants to see the interconnection of Mindanao to the other grids, he said: “We are targeting 2020, if we miss, maybe by just a bit only.”

He said TransCo under his watch will also look into the possibility of using the grid for other uses, including “any related business not related to transmission and we can earn from it.”

“So that the end result is [for the concession agreement] to be beneficial to us, the government, and to the public, our consumers,” he said.

Mr. Fuentebella said the DoE and TransCo are conducting an inventory of the transmission facilities, while reviewing congested spots in power generation.

He said the agencies are looking at a “scientific and logical” approach to guide investors on where they could locate their power generation projects.

In a statement, NGCP said it welcomed the appointment of Mr. Matibag and looked forward to working with him.

“We are very eager to show the progress and developments to the grid accomplished by NGCP since take over in 2009, and we are excited to work with him to further improve the grid,” it said.

NGCP’s franchise came after the country passed Republic Act 9136 in 2001 or the “Electric Power Industry Reform Act of 2001” (EPIRA), which paved the way for the sale of government energy assets.

The law separated the different components of the sector, including power transmission, which was spun off to state agency TransCo ahead of its turnover to the private sector through concession.

Unlike outright sale, the concession agreement allowed the government to keep ownership of the transmission assets through TransCo.

The operation, maintenance and expansion of the grid was handed over to NGCP, the consortium of Monte Oro Grid Resources Corp., Calaca High Power Corp. and the State Grid Corporation of China as technical partner, that won the 25-year concession in 2007 in a competitive bidding.

NGCP marked its official start of operation as electricity transmission service provider in 2009.

“Under a congressionally granted 50-year franchise, NGCP has the right to operate and maintain the transmission system and related facilities, and the right of eminent domain necessary to construct, expand, maintain, and operate the transmission system,” the company’s website says. —