Meralco sets aside P4.1-B for purchase of Transco assets

The Manila Electric Co. (Meralco) plans to buy 21 subtransmission lines and 17 sub-station worth some P4.1 billion within its franchise areas in Luzon including Metro Manila.

Meralco vice president and head of transmission and distribution Ricardo Buencamino said initially, they intend to buy only subtransmission assets (STAs) of the National Transmission Corp. (Transco).

Transco has released a new list of sub-transmission lines and substation assets that it is willing to sell to power distribution utilities before June this year.

Initially, Meralco allocated only P1.1 billion to buy the STAs of Transco in Cavite, Batangas, Laguna and Bulacan. But with the inclusion of Transco’s substation assets, Meralco decided to raise its budget to P4.1 billion which covers at least 80 percent of the P5.5 billion worth of STAs that Transco lined up for sale.

Buencamino, however, said Meralco is still awaiting the final draft of the guidelines on the sale of the STAs of Transco.

The Meralco official said they are proceeding with the assessment of the assets that it intends to buy. "We just finished the survey on the STAs in the Cavite area. The survey was done in coordination with the Commission on Audit (COA)," he said.

Aside from Cavite, he said Meralco is also eyeing other STAs available for sale like those located in Laguna, Quezon, Batangas, Bulacan, Rizal and Metro Manila.

Most of the assets that they will buy in Metro Manila are substations located in Araneta in Cubao and Zapote in Alabang.

Buencamino said they are trying to negotiate with Transco if it will allow Meralco to enter into a "package sale". "We are talking with Transco if we can purchase these fixed assets in package deal. We have to determine the boundary or up to what point where we can buy the assets," he said.

But, he said Meralco will give priority to Cavite STAs. "We have allocated some P600 million for these assets. We want to buy these assets to capture more customers in the area," he said.

At present, they have 34 big or core customers (consuming one megawatt) in Cavite. But he said Meralco is targeting 269 potential customers in Rosario, Cavite particularly the locators in Cavite Economic Processing Zone Authority (CEPZA).

Buencamino said the purchase of these assets is aimed at improving the quality of service of Meralco in these areas. "Acquiring these facilities will improve our quality of service to customers," he said.

He said this will also partially reduce the wheeling charge it is currently paying to Transco.

Meralco is paying a transmission charge of P221 per kilowatt (kW) and a wheeling charge of P26.03 per kW. "We will able to realize some savings of we will buy these assets," he said.

He also noted that they will not worry anymore when it comes to maintenance of these assets. "We will be the ones maintaining it (the assets)," he added.