Malampaya to fund grid interconnection projects
NATIONAL Transmission Corp. (TransCo) plans to take over all of the country’s power grid interconnection projects and fund their construction by using P90P110 billion of the government’s share in the revenue of the Malampaya offshore gas project, its president said.
“The direction of TransCo right now is to do all the interconnections,” Melvin A. Matibag, TransCo president and chief executive off icer, told reporters in a recent gathering with Energy department off icials.
He said the interconnection projects include the proposed P52-P53 billion submarine cable that will link the Visayas and Mindanao grids via Dipolog City and the southernmost tip of Cebu.
Also included is the interconnection of Antique province to Mindoro island, Bohol and Cebu islands and an additional facility linking Panay and Negros islands, Mr. Matibag said.
He said TransCo had used as a benchmark the cost cited by privately owned National Grid Corp. of the Philippines (NGCP), which he said previously presented plans to build the transmission facilities.
Asked about the funds from Malampaya, he placed the current available total at P193 billion. He said the total will still increase as the government has a share throughout the project’s duration. The gas reserves are expected to be depleted by 2022-2024.
Mr. Matibag also said he was considering the construction of a “redundancy” transmission facility that will connect the grids of the two island groups on the eastern side of the country — from Leyte to Mindanao. He said the transmission line would ride on the bridge proposed by the Department of Public Works and highways that will connect Visayas to Mindanao.
He said he was preparing a position paper on the interconnection projects, which he said had been approved in principle by the Department of Energy (DoE) and the Department of Finance.
In a Senate budget hearing on Tuesday, Energy Undersecretary Felix William B. Fuentebella told lawmakers that the DoE would seek clearance from the Off ice of the President to endorse the power transmission facilities as priority projects for the use of the Malampaya fund.
Asked about a possible conflict with NGCP, which has also proposed building the facilities, Mr. Matibag said: “My position is this, under the concession agreement, they are exclusively operation and maintenance.”
He said under the agreement, ownership of the existing facilities remain with TransCo.
“Since we are the owner, we can still do that (interconnection),” he said. “And I will invoke the benefits to the public.”
The benefits, he said, include that the cost of building the facilities will not be passed on to consumers, an arrangement that exists under current regulations issued by the Energy Regulatory Commission ( ERC). He said NGCP would even benefit because as the grid operator, it can collect charges for maintaining the facilities.
Mr. Matibag said TransCo had to “benchmark” its pricing for the projects on the figures given by NGCP as his agency lacked the technical capability to do so.
“But I can always go lower than that…” he said, adding he was looking at a project cost that is lower by 20-30% than what NGCP quoted.
He also said that he expects to complete the project faster than the 2020 target previously given by NGCP for its proposal, saying that TransCo as a state agency can do away with the lengthy permitting process and the hearings at the ERC.
“So the chance of interconnection between Visayas and Mindanao is during the administration of the President (Rodrigo R. Duterte),” Mr. Matibag said. —