THE Energy Regulatory Commission (ERC) has granted provisional authority to the National Grid Corp. of the Philippines (NGCP) to implement the interconnection between the Visayas and Mindanao power grids for around P51.7 billion.

ERC’s initial approval deepens the tug-of-war between the privately owned grid operator and state agency National Transmission Corp. (TransCo), which is also proposing to handle the project.

“The provisional approval granted to NGCP to implement the Visayas-Mindanao Interconnection Project will enable power supply importations among the Luzon, Visayas, and Mindanao grids,” said ERC Commissioner Alfredo J. Non in a statement on Tuesday.

The project covers the linking of the power grids via Cebu and Dipolog City as the landing points of the undersea cable. The converter stations in Visayas and Mindanao will be located in Sibonga, Cebu and Aurora, Zamboanga del Sur, respectively.

Mr. Non, who is also the ERC’s officer-in-charge, said the deficiency of supply in Visayas may be supplied by importing power from Luzon or Mindanao.

“Hence, this Visayas-Mindanao Interconnection will help address the insufficient power supply and will also help optimize the available power supply in the Philippine Grid,” he added.

The project, according to the NGCP estimates, is expected to be completed in 46 months or nearly four years, or still within the term of the current political leadership, which ends in 2022. The estimated cost is P51.6967 billion.

The ERC said the provisional authority was issued under its order dated July 11, 2017. It said the project is in support of the government’s vision to link the country’s major grids into a single national grid.

With an interconnected grid, overall power supply security is expected to improve as sharing of reserves will be possible.

The project also aims to support the operation of the electricity market “by maximizing the use of available energy resources and additional generation capacities in Visayas and Mindanao which include the renewable energy resources,” the ERC said.

The agency said its action on NGCP’s proposal is subject to certain conditions.

“The proposed project shall be subject to optimization based on its actual use and/or implementation during the reset process for the next regulatory period,” it said.

It also said NGCP is required to conduct competitive bidding for the purchase of major materials in the implementation of the project, and to pay the permit fee.

The ERC statement comes after TransCo last month told reporters that the agency wants to take over all of the country’s power grid interconnection projects at a cost of around P90-P110 billion. It said it was looking at the government’s share in the revenue of the Malampaya offshore gas find to fund these projects.

Melvin A. Matibag, TransCo president and chief executive officer, said the interconnection projects include the proposed Visayas-Mindanao link as well as those of Antique and Mindoro, Bohol and Cebu, and Panay and Negros.

He said TransCo had used as benchmark the cost cited by NGCP, which he said previously presented plans to build the transmission facilities. — Victor V. Saulon

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