By Myrna M. Velasco
The Energy Regulatory Commission (ERC) has green-lighted the Taguig extra high voltage (EHV) substation project of transmission firm National Grid Corporation of the Philippines (NGCP) that will command a capital outlay of P9.7 billion.
ERC logo(Photo courtesy of www.erc.gov.ph)
The project is due for implementation this year and the awarding of contracts for the facility’s construction shall be carried out through competitive bidding, according to the ERC.
The regulatory body specified that, upon completion of this facility, it could serve as another “drawdown substation” so the load of San Jose EHV substation can be decongested.
The San Jose substation in Bulacan basically serves as a “converging point” for the capacity wheeling of various power plants operating in Luzon – and, if congestion and bottlenecks occur, it could affect power supply reliability in the grid.
As emphasized by ERC Chairperson Agnes T. Devanadera, “the approval of NGCP’s Taguig extra high voltage substation project will address the growing power demand and power import in Metro Manila.”
She qualified that this will enable additional capacities to be “injected into the transmission network,” especially by new power generators that will soon be commercially commissioning their generating facilities.
Beyond alleviating the carrying capacity of the San Jose substation, the ERC noted that the Taguig EHV substation “will also ease the existing 230-kilovolt single circuit line from Quezon to Muntinlupa during emergency situations, such as grid failure.”
The industry regulator similarly emphasized that the new facility will “address the severe under-voltage in the 230-kV substations within Metro Manila due to the single circuit configuration and heavy loading condition of the Quezon-Doña Imelda-Paco-Muntinlupa 230 kV transmission line.” ERC further highlighted that the new facility “will complement the plan of linking the new drawdown substation to the Taytay 230-kV substation,” noting that such “will make an additional 230kV transmission line link to the Taytay substation.”
The mandated upgrade and expansion of transmission facilities in the country will solve reliability issues of the power system; and more importantly, it could guarantee more efficient delivery of electricity service to end-users.
In giving its go-signal to the Taguig substation project, the ERC stipulated that the venture “is subject to optimization based on its actual use and/or implementation during the reset process for the next regulatory period.”
The cost recovery on investments to projects by NGCP is via performance-based regulation (PBR) of tariff setting, in which the ERC determines the maximum allowable revenue (MAR) that it could pass on to ratepayers via their electric bills.
In terms of the required “optimization”, the ERC noted that such “entails the removal of redundant assets and over-capacity, including inefficient design and gold-plated engineering within the existing network,” or what it deems as the incorporation of costly and unnecessary refinements into the structure.