Transco asks government to fund interconnection project

THE National Transmission Corp. (Transco) wants the government to finance the multibillion-peso Visayas-Mindanao interconnection project (VIMP) so as to avoid any pass-on cost to consumers.

“What we mentioned in our manifestation is for Transco to be appointed as supervisory authority of the government for the said project,” Transco President Melvin Matibag said. “Another thing is the possibility of financing the project so there will be no additional cost to consumers.”

The grid-interconnection project may be undertaken by the National Grid Corp. of the Philippines (NGCP), according to Matibag.

Quoting various computations, he said consumers may expect to shoulder a total of P0.37 per kilowatt-hour (kWh). Matibag added it is the intention of TransCo to unburden the consumers from any pass-on cost.

“We submitted a memorandum to the Office of the Secretary [of the Department of Energy] regarding the possibility of Transco financing the project. It does not necessarily mean that Transco will undertake the project,” Matibag explained. “It will still be NGCP, but maybe through government assistance, so there will be no additional cost to consumers.”

The project involves the interconnection of the Visayas and Mindanao via Cebu and Zamboanga. The converter stations in the Visayas and Mindanao will be in Sibonga, Cebu, and Aurora, Zamboanga del Sur, respectively. The project is estimated to be completed in 46 months with an estimated cost of P52 billion.

The project is in support of the government’s vision to interconnect the major grids into a single national grid. The project is expected to help improve the overall power-supply security in the country as sharing of reserves will already become possible.

The project also aims to reinforce the operation of the electricity market by maximizing the use of available energy resources—including renewables—and additional generation capacities in the Visayas and Mindanao.

The provisional approval granted to NGCP to implement the VIMP will enable power-supply importations among the Luzon, Visayas and Mindanao grids, Matibag said.

“For instance, the deficiency of supply in the Visayas may be supplied by importing power from Luzon or Mindanao,” he added. “Hence, this Visayas-Mindanao interconnection will help address the insufficient power supply and optimize the available power supply in the Philippine grid.”

Matibag said he expects to resolve all issues with NGCP soon. He added 80 percent of the 10 to 12 issues, including the VIMP project, would be resolved soon, possibly by year-end.