DOE to finalize plan for Napocor asset sale

The Department of Energy (DOE) is expected to finalize a Transmission Development Plan (TDP) by April in preparation for the sale of the transmission assets of the National Power Corp. (Napocor) by the middle of this year.

Energy Secretary Vincent S. Perez Jr. said the TDP is necessary since this will contain the amount of investment that needs to be poured in by the winning buyer of the transmission assets of Napocor.

"It (TDP) goes with the (existing) Power Development Plan. This is the proposed capital expenditure program for National Transmission Co. (Transco) in the next 10 years," he said.

Under Republic Act No. 9136 or Electric Power Industry Reform Act (EPIRA), the government has to sell the transmission and generation assets of Napocor. Accordingly, an entity, Transco, was created as a spin off firm of the state-owned power firm which will be sold either through concession or outright sale.

Perez said that TDP would be the basis to be used by the winning bidder/buyer/ concessionaire to improve or expand the existing transmission assets of Napocor.

"The TDP will serve as a framework. This will entail what they are required to do," he said.

The TDP would also ensure that the new owner/concessionaire of the Transco would adhere to government’s objective of providing better services to customers under a newly-restructured power industry.

The energy secretary said the DOE would submit the TDP to the Energy Regulatory Commission (ERC) for approval.

He explained that the DOE would just prepare the TDP while the ERC would approve it as part of the commission’s mandate to go over the rate base application of distribution utilities.

Specifically, the ERC would determine how these new investments could be recovered and passed on to the consumers by the new owner/concessionaire of Napocor’s transmission assets.

Earlier estimates show that new owner/concessionaire of Transco will have to spend about $200 million to $250 million each year in the next 10 years for the expansion and improvement or modernization of the existing transmission facilities of the state-run power company.

For this year alone, the Transco is expected to spend about P17.3 billion for its capital expenditure program in 2002.

The 2002 capex is slightly higher than the P15.75 billion spent by Napocor for the upgrade and modernization of its transmission lines in 2001.