DoE maintains it has final say on energy-related plans

Posted on April 22, 2017

THE Department of Energy (DoE) has reminded state agencies attached to it that it has the final say on separate energy-related plans, including the proposal by the National Transmission Corp. (TransCo) to take over the project to link Mindanao’s transmission grid to that of Visayas.

TransCo wants to take over the project to link Mindanao’s transmission grid to that of Visayas, a project that NGCP has already said it will handle and manage. BW FILE PHOTO
“DoE has control over plans -- energy plans -- ng lahat. So kung ano man ‘yong idea ng GOCCs (So whatever idea government-owned or -controlled corporations may have) we have to align their ideas to the total energy plan (of the department),” Energy Undersecretary Felix William B. Fuentebella told reporters on the sidelines of a seminar on industry issues on Thursday.

Mr. Fuentebella made the comment in response to questions about the proposal by TransCo to handle the interconnection project for Mindanao.

TransCo earlier said it was drafting a memorandum for the president as well as preparing an executive order calling for the state agency as the developer of the project that will interconnect the Mindanao grid to the that of the Visayas.

The move will challenge the role of privately-owned National Grid Corporation of the Philippines (NGCP), which has firmed up its plan to handle the project, even putting a 2020 deadline for its completion at a price tag of at least P52 billion.

“It’s being prepared,” said Melvin A. Matibag, TransCo president and chief executive officer. “We will justify why it should be Transco...instead of NGCP that will build.”

“When we do that, we have to respect the concession agreement,” he said, adding that once completed, the interconnection asset will be handed over to NGCP for management and maintenance.

He said if the government will handle the project, it will be eliminating pass-through costs to consumers. NGCP is allowed to bill consumers of the capital spent on transmission projects as approved by the Energy Regulatory Commission (ERC).

Mr. Matibag said he was looking at the Malampaya funds as the source of financing for the project. He said this was the reason why he was preparing an executive order.

“The Supreme Court decision is very clear. As long as it is an energy-related project, puwede (it’s allowed),” he said.

The Department of Energy (DoE) last month placed the so-called “Malampaya funds” at P235.662 billion, which represents the government’s share in the revenues derived from the offshore gas find west of Palawan. It is also looking at these revenues -- officially called energy resource development fund -- to pay for government debt incurred in building power plants in the 1990s, when the country experienced one its most crippling power supply crises.

“This is something related to energy. You connect Visayas and Mindanao then you provide energy security on the entire island,” Mr. Matibag said.

“I think there will be enough funds for that,” he said.

The need to interconnect the Mindanao grid to that of the Visayas, which is already linked to the Luzon grid, comes as power capacity on the southern island expands with the entry of new power plants and the upcoming testing and commissioning of new facilities.

Asked about TransCo’s proposal, Sherwin T. Gatchalian, chairman of the Senate energy committee, said his guiding principle is which proponent can offer a cheaper price and which proposal would be most beneficial to consumers.

“TransCo is government, so in effect the benefit will quickly redound to the consumers,” he said. -- Victor V. Saulon