THE Energy Regulatory Commission (ERC) has approved a P65.4-million capital expenditure (capex) application filed by Isabela I Electric Cooperative, Inc. (Iselco I) which will go towards the installation of a new power transformer and related equipment in one of its substations.

In a decision posted on its website, the commission said Iselco I had applied to commit funds to install a new 20/25 megavolt ampere power transformer at its Reina Mercedes substation to address capacity issues.

Iselco I said its Reina Mercedes substation had exceeded the 70% capacity threshold prescribed by a distribution utility planning manual for electric cooperatives.

“Without the implementation of any capacity augmentation project/s, approximately 10,000 customers of Iselco I may be affected by a series of rotational brownouts,” the electric cooperative told the ERC in its petition.

In a ruling implemented on June 11, the commission ruled that the proposed project is “technically feasible” and offers the most affordable option for addressing capacity concerns.

“The Commission recognizes that this project will ensure the integrity of Iselco I’s distribution system and will allow Iselco I to accommodate both existing and new consumers,” it explained.

The ERC said Iselco I obtained access to P10.18 million and P50 million worth of financing from the Rural Electrification Financing Corp. and Development Bank of the Philippines, respectively, in 2018 and 2019 to finance the project.

According to the regulator, Iselco I had failed to secure clearance before acquiring the loans. As a result, the ERC said it will issue a show-cause order to Iselco I.

The commission also required the company to pay permit fees of P490,503, as authorized by its capex guidelines and revised schedule of fees and charges.

The decision was signed by the agency’s Chairperson and Chief Executive Officer Agnes VST Devanadera, and four commissioners.

Iselco I holds an exclusive franchise to distribute power in two cities and thirteen municipalities in Isabela. — Angelica Y. Yang