TransCo pushes 800-MW Leyte-Mindanao linkup project

The National Transmission Corp. (TransCo) is pushing government to undertake the 800-megawatt (MW) Leyte-Mindanao interconnection project (LMIP), a top company official said.

TransCo president and CEO Alan T. Ortiz said this project is a crucial factor in implementing the wholesale electricity spot market (WESM) in Mindanao.

"The energization of the Leyte-Cebu interconnection project made it possible for the WESM to start its pilot project. They also want to implement it for Mindanao, which reinforce the position for Leyte-Mindanao," Ortiz said.

TransCo had earlier proposed for the speeding up of the implementation of the LMIP to 2008 from the earlier scheduled 2011 to help resolve an imminent power shortage in Mindanao.

But the government decided to defer the implementation of the P18 billion interconnection project in 2002 due to financial constraints.

However, Ortiz said TransCo will conduct another feasibility study to encourage the government to push through with the project.

According to Ortiz, they have to update the study on the project to look for ways to justify their proposal. "We need to update the previously done studies brought about by the very recent development which is the clamor for power supply. Mindanao totally depends on the Agus hydropower plant there. We believe that an additional implementing power source is necessary and inevitable," he said.

Since the initial problem involved financing, he said they will try to explore the possibilities of using various financing schemes such as tapping multilateral creditors, combination of government and private sector loans, term facility and project financing.

Aside from helping solve the power shortage problem, TransCo said the possible acceleration of LMIP is consistent with the objective of Republic Act 9136 or the Electric Power Industry Reform Act (EPIRA).

"The EPIRA requires that there should be competition in the market. We cannot achieve utmost competition in the market if we do not have complete interconnection," the TransCo official said.

The LMIP was supposed to be included in the list of projects that the Asian Development Bank (ADB) will finance for 2003.

But the multilateral financial institution reportedly cancelled the project from its list after the government floated its intention to defer it.

Since the privatization of TransCo is already in the offing, the government opted to defer the project to allow the winning concessionaire to carry out the project.

"It was decided that because of the magnitude of amount needed for the project, it is better for it to be implemented by the winning concessionaire," the TransCo official said.

The LMIP was supposed to be the final phase in the unification of Luzon, Visayas and Mindanao grids. It will enable the deferment of additional baseload plants in the Mindanao region and lower the system production cost as a result of the overall pooling of resources.

The interconnection project is designed for 250-kilovolt high-voltage density cable bipolar link with a total transfer capacity of 500 MW.