TransCo’s Matibag says govt should fund Visayas-Mindanao interconnection project

By Lenie Lectura – March 2, 2017

from Manila Bulletin

The National Transmission Corp. (TransCo) wants the P52-billion Visayas-Mindanao Interconnection Project (VMIP) to be shouldered by the government and not power consumers.

“I want to look for a way that the cost of the connection should not be passed on to consumers,” TransCo President Melvin Matibag said on Thursday afternoon.

The National Grid Corp. of the Philippines (NGCP), which won the concession to operate and manage the grid system in December 2007 for $3.95 billion, will undertake the project envisioned to be completed by 2020.

“That  [P52 billion] will be an additional cost to the consumer. Baka matapos na iyung concession, ’di pa nabayaran ’yung P52 billion. [The P52- billion expense may remain unpaid beyond the expiry of the concession.]I want to look for a way that the cost of the connection should not be passed on to consumers,” he said.

One option is for the project amount to be included in the General Appropriations Act (GAA). “I’m having some representation from our Congress. I’m thinking if it can be included into the GAA [since it’s not included in the items]. I’m just thinking of ways for consumers will no longer bear the cost of that interconnection,” Matibag said. “I want to know if we can do that.”

The TransCo chief said this is still being reviewed. He said a provision in the concession agreement states that the development and improvement of the transmission grid is exclusive to the concessionaire. “I want to define that exclusiv[ity clause,” he said.

Last month NGCP made public the result of a study that will interconnect the Visayas and Mindanao grids.

“NGCP is pleased to report that we already finished the hydrographic survey that will determine the route of the Visayas-Mindanao Interconnection Project. With this development, we now have a clearer plan on the project’s implementation. Power- resource sharing between the country’s major islands will now become a reality,” the grid operator said.

In an NGCP-commissioned hydrographic survey conducted from September to November 2016, a viable route along the country’s western seaboard—beginning in Cebu and terminating in Dipolog—was determined as viable for the implementation of the plans of interconnecting the Visayas and Mindanao grids.

The project is envisioned to be finished by 2020, assuming all regulatory approvals are secured on time.

The Luzon and the Visayas grids have long been connected via NGCP’s Naga-Ormoc High Voltage Direct Current (HVDC) line.

With the hydrographic survey result, NGCP will now proceed with the preparation of a conceptual design, detailed cost-estimate and update of system simulation study using the Cebu-Dipolog route, in order to complete documents needed when it filed its application before the Energy Regulatory Commission (ERC) in April this year.

“We need the support of the government, the Energy Regulatory Commission, the Department of Environment and Natural Resources and the different local government units the project will traverse, among others, to push this forward. With their full support, we are confident that we will be able to complete this project on time,” stated the company.