System operator National Grid Corporation of the Philippines (NGCP) forthrightly stated that it can deliver more transmission projects to commercial completion if approvals of the Energy Regulatory Commission (ERC) on its cost recoveries for invested capital could be granted promptly.

“With expedited project approvals and proper support from the ERC and the DOE (Department of Energy), NGCP can do more and is ready to deliver more available power supply to the Filipino people,” the company stressed.

Development of transmission facilities will be crucial in the country’s bid to arrest a threatening power crisis; and will also ably support the massive scale buildout of renewable energy (RE) facilities.

Major capital expenditures (capex) being sought for immediate regulatory approval had been NGCP’s P67.98 billion worth of capital outlay in the 230 kilovolt (kV) Cebu-Negros-Panay (CNP) transmission backbone project in the Visayas grid.

Similar to its predicament of meager cost recovery in the P20.94 billion Mariveles-Hermosa-San Jose transmission project, NGCP indicated that the provisional approval for the CNP project just allowed cost pass-on amounting to P176.75 million, and that just accounted for one year-worth of capex for stage 3 of the project.

The last phase of the CNP project alone warranted humongous capital outlay of P43.41 billion – and that too is still subject for final determination and approval by the ERC.

In the regulatory scheme prescribed for the deregulated power industry, the tariffs of regulated utilities like NGCP would have been set on a forward-looking approach as anchored on the performance-based rate-setting (PBR) methodology.

However, due to the regulatory lag of almost 10 years, the cost recoveries for invested capital as well as pass-on of these costs in the rates being billed to customers are already turning out to be historical, rather, than a five-year forward looking mechanism of regulation.

NGCP likewise emphasized that the completion of its major transmission projects is expected to calm the nerves of agitated generation companies – primarily those that have power plants sited within the domains of the upgraded transmission facilities.

The transmission company announced that it is “more than ready to accommodate additional generation capacity following the completion of its latest transmission backbone projects to meet the growing demand for power.”

For the CNP project, in particular, that has been a long awaited development so the full capacities of solar facilities – primarily in Negros – could be viably wheeled into load centers that will be in need of additional power supply.

NGCP reiterated that “aside from strengthening our transmission network, the recently completed backbone projects allow NGCP to create room for additional generation capacity, whether from conventional or renewable power sources.”

The company noted that the Mariveles-Hermosa-San Jose can accommodate the transport of additional loads from power plants in Bataan and Zambales – and the scale of its carrying capacity could top 8,000 megawatts.

Moreover, the submarine cable underpinning the CNP facility could support additional 800MW capacity within the interconnected islands; and it also has 2,400MW of overhead transmission capacity in Cebu and Negros.

Another landmark project completed by NGCP had been the Mindanao-Visayas interconnection project – and that was a concretization of a nationally connected grid long desired by the country, because that already allowed the sharing of capacity between Mindanao to Visayas and Luzon grids.

Meanwhile, its roll of ongoing projects include the 500kV Tuy-Dasmarinas transmission line which could support load wheeling of 2,400MW capacity; and the Cebu-Bohol interconnection project with a carrying capacity of 1,200MW.