Philippines: Reclassification of Salong-Calaca 230-kV transmission line OK'd

Philippines: Reclassification of Salong-Calaca 230-kV transmission line OK'd

The bid of the National Grid Corporation of the Philippines (NGCP) to
re-classify the Salong-Calaca 230 kiloVolt (kV) line connection facility and
the New Salong substation into "transmission facilities" has secured the
approval of the Energy Regulatory Commission (ERC).

The power industry regulator has qualified that since the assets no longer
just serve one customer, their re-classification into "transmission assets"
and transfer into the charge of NGCP have already been warranted.

"Based on the documents submitted, the Commission finds merit in the
proposed reclassification of the Salong-Calaca 230kV line. Thus, the subject
asset should be classified as transmission assets," ERC has noted.

Further, the regulatory body has reckoned that "the New Salong 230kV
switching station remains to be a transmission asset since it was designed
and constructed to operate and function as a transmission asset from the
start."

The preliminary functional criteria set for the Salong-Calaca line had been
as a connection asset to service the needs of Steel Asia Manufacturing
Corporation (SAMC); while the New Salong switching station was intended for
the load of the South Luzon Thermal Energy Corporation (SLTEC) coal plant.

In the ERC ruling, however, it prescribed that its go-signal is just limited
to the re-classification of the assets and will not include yet the plea of
the parties for drawing up the "fair market valuation" of the assets.

"It is premature to raise the issue on the fair market value considering
that the petition on hand is for the reclassification of the subject
assets," ERC stressed.

The Commission raised that after the assets' reclassification, "NGCP and
SLTEC would negotiate for the fair market value of the subject assets and in
the event that the parties disagree, NGCP and SLTEC would file with the
Commission a dispute resolution."

As to the cost recovery of the New Salong switching station project, it was
directed that such shall be applied for as part of the maximum allowable
revenue (MAR) that must be recouped by NGCP under its 3rd regulatory reset
under performance-based regulation (PBR) scheme.

SLTEC earlier lodged its intervention on the case, primarily batting "for
the reimbursement of NGCP within the 3rd regulatory period of its cost for
developing and constructing the New Salong switching station, the cost of
acquiring the Salong-Calaca 230kV line from SAMC; and the cost for the
rehabilitation, modification, maintenance and reinforcement of the acquired
SAMC transmission line."

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Ref:
http://www.mb.com.ph/reclassification-of-salong-calaca-230-kv-transmission-l
ine-okd/

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com