TransCo assets placed at P149B

Sinclair Knight Merz (SKM), an independent consultancy firm, has placed the net assets of the National Transmission Corp. (TransCo) at P149 billion as of end-2005, a company report showed.

Based on TransCo’s 2005 annual report, the company’s total assets reached P185.5 billon, an increase of P52 billion or 39 percent over 2004, mostly due to the revaluation of assets which was conducted by SKM.

The results of the revaluation were taken up in the books following the approval of the SKM report by the TransCo and Power Sector Assets and Liabilities Management Corp. (PSALM) boards.

SKM’s appraisal is crucial to stir up investor interest in the next round of bidding for TransCo’s privatization set this September.

The revaluation result was used by TransCo in determining its annual revenue requirement, maximum allowable revenue and effective transmission charges for the second regulatory period of 2006-2010.

The asset revaluation was in compliance with the requirements of the transmission wheeling rates guidelines of the Energy Regulatory Commission (ERC).

Net cost of assets used in operations accounted for 80.3 percent of the total assets.

Aside from the asset revaluation, various capacity additions such as Leyte-Cebu Uprating and transmission line and substation improvements caused the increase in utility assets.

The cost of uncompleted transmission lines, substations and other improvements was recorded at P20.09 billion or 10.8 percent of the total assets.

For the period under review, TransCo’s current assets were reported at P14.59 billion.

Power receivables account for 65 percent of these assets at P9.44 billion, consisting of collectibles for P3.04-billion transmission delivery service; P6.37-billion ancillary services and P29-million universal charge.

Total receivables from Manila Electric Co. (Meralco) amounted to P6.37 billion, 67 percent of which or P4.28 billion pertained to its overdue ancillary services accounts due to shortfall from its contract with the National Power Corp. (Napocor) from Sept. 26, 2002 to Oct. 25, 2004 plus imbalance charges.

The rest of the current assets consisted of P3.48 billion supplies for operation and cash and other assets of P1.66 billion. The P454-million deferred charges generally consisted of preliminary survey and investigation costs of transmission projects.

As of end-2005, the company’s net utility revenue improved by 0.3 percent to P24.29 billion from 2004’s P24.22 billion.

Total operating expenses was contained at P8.08 billion, lower by P994 million or 11 percent from a year-ago level of P9.07 billion.

The net operating income for the year under review is recorded at P16.2 billion, higher by 7.1 percent or P1.07 billion than the previous year’s level.