System operator National Grid Corporation of the Philippines (NGCP) is batting for regulatory approval on full cost recovery of its P20.94 billion investment in the newly reinforced 500-kilovolt Hermosa-San Jose transmission line, which is now supporting the wheeling of additional capacities in Central Luzon areas.

The transmission firm qualified that while it infused heavy capital outlay for the completed facility, the Energy Regulatory Commission (ERC) just allowed initial cost recovery of very marginal 0.1% or just P19 million versus the total project cost.

The Hermosa-San Jose component of the project had been funneled with P16.5 billion investment; while the Mariveles-Hermosa portion warranted capital expenses of P4.4 billion.

The newly completed transmission line project will strategically underpin demand growth for Luzon grid with its capability to wheel additional 2,200 megawatts of new power plant capacities.

“With the completion of this critical project, NGCP is optimistic that the ERC will act on the overdue recoveries applied for by NGCP,” the company stated.

The transmission upgrade project, according to the power firm, concretizes the whole loop of the Mariveles-Hermosa-San Jose transmission facility that can already underpin transport capacity of up to 8,000 megawatts.

The entire project comprises of 395 transmission towers, 275.6 circuit- kilometers of transmission lines, two new substations and 2,000 megavolt-ampere (MVA) of substation capacity.

NGCP emphasized that the capacity shoring up in the transmission system will mostly benefit additional capacities from greenfield or expansion power plants that are sited in Bataan and Zambales domains.

“Its full completion and energization at full capacity are critical in accommodating additional power generation to the grid to prevent Luzon-wide power interruptions,” the transmission firm added.

Line 1, which was first energized in May last year, had an initial carrying capacity of 2,000 megawatts and this is catering mostly to generating units in Bataan; but when the project was already fully completed this year, its transfer capacity had been ramped up to 4,000MW.

And with the full completion of Line 2, NGCP specified that the capacity would already double to 8,000MW, hence, that can prudently serve the capacity wheeling needs of existing as well as incoming power generation ventures.

It is worth noting that the Department of Energy (DOE) had persistently prodded NGCP on the completion of that transmission line facility to decongest the transport of capacity from new power plants in Bataan and other greenfield generating assets in Zambales.

With the recent energization of the transmission line, NGCP declared that “this marks the full completion and energization at full capacity of this critical facility, strengthening and expanding the grid.”

The transmission project had been accorded with ‘energy project of national significance’ (EPNS) status, yet it was still hobbled by challenges -- primarily the niggling right-of-way (ROW) issues which ended up in legal disputes, thus delaying some components of the project.

Following the issuance of unfavorable judicial rulings around July last year, installation and construction activities had been temporarily stopped by NGCP, hence, that partly contributed to the supply predicaments also of Luzon grid in the past months.