Cepalco questions Transco decision on its assets

The Cagayan de Oro Power & Light Co. (Cepalco) is questioning the decision of the National Transmission Corp. (Transco) not to sell its sub-transmission assets (STAs) within the Cepalco franchise area.

"We think there is a controversy here. Transco said those under our franchise areas are not considered STAs," Cepalco chairman and CEO Ramon Abaya said.

STAs are transmission lines typically rated at 69 kilovolts and below. A total of 7,547 circuit kilometers of lines nationwide will be up for sale. Its estimated value is P5 billion.

Abaya believes that those directly connected lines should be classified as STAs.

With this issue, he said they see a possible delay in the selling of STAs. Transco expects to complete the sale of the STAs by next year.

Transco has approved a lease purchase financing program for electric cooperatives which will allow the co-ops to pay a down payment equivalent to only 20 percent of the selling price to acquire possession of the STAs.

The transmission firm will turn over the responsibility of operating and maintaining these assets to the electric co-ops upon the signing of the lease purchase contract and the receipt of the downpayment.

The co-ops will acquire ownership of the assets after they have completed payment of the remaining 80 percent of the selling price on installment basis over a period that should not be more than 75 percent of the remaining life of the assets.

The Development Bank of the Philippines (DBP) will offer a credit facility for STAs‚ expansion and improvement under its rural electrification program.

The selling of the STAs will ensure the continued quality, reliability, security and affordability of electric service to end users.

While the lease purchase scheme is initially being offered to the more than 100 electric cooperatives in the country, Tranco will reply to expressions of interest from non-ECs.

Transco is awaiting approval by the Energy Regulatory Commission (ERC) for its conditional sale contract to the San Fernando Light and Power Corp. which was signed in January this year before finalizing these deals.

Transco has also signed conditional sale contracts with private distribution utilities Angeles Electric Corp. and Cabanatuan Electric Corp.