Lopez, Aboitiz utilities buy Transco assets

MANILA, Philippines - The National Transmission Corp. (TransCo) has sold P319 million worth of subtransmission assets to two of the country’s largest power distributors, in line with efforts to improve transmission efficiency. In a statement, the Transco said it signed the deeds of sale on Sept. 25 for Lopez-led Manila Electric Co. (Meralco) and Aboitiz-owned Subic Enerzone Corp. Meralco got P188 million worth of the assets, while Subic Enerzone paid P131 million for its share. The Energy Regulatory Commission approved the contracts on June 30 and April 30, respectively. The Electric Power Industry Reform Act of 2001 mandates the sale of government subtransmission lines typically rated at 69 kilovolts and directly connected to distribution utilities. Privatizing the subtransmission assets is expected to be beneficial to power customers in the long run. By buying these assets, distributors can improve their operations and expand their franchise area, thereby serving more customers. The Transco, on the other hand, can focus on making the high-voltage transmission network more reliable and efficient. More than P2.6 billion worth of the Transco’s subtransmission assets have been sold since 2004, less than half of the 70% of Transco lines worth P6.3 billion targeted to be privatized by 2011. The Meralco deal involves various structures in Northern Luzon, including one 13.8-kilovolt, five 34.5-kilovolt, and two 69-kilovolt lines in Bulacan; and two 69-kilovolt lines in Pampanga. In Southern Luzon, structures bought include one 69-kilovolt line in Laguna and three 115-kilovolt lines in Cavite. Meanwhile, Subic Enerzone bought 7.24 circuit-kilometers of subtransmission assets, including the Olongapo-Subic Bay Metropolitan Authority (SBMA) Lines 1, 2 and 3 and the Subic-SBMA Line 4, as well as the disconnection switches at the Kalaklan Metering Point. Lopez-led Meralco is the country’s largest electric distribution utility with a franchise area covering Metro Manila, the entire provinces of Rizal, Bulacan and Cavite, as well as parts of Pampanga, Laguna, Quezon and Batangas. Subic Enerzone is owned by Aboitiz Power Corp., which manages the power distribution system of the SBMA in Olongapo City. Subic Bay is home to various industries ranging from electronic communications technology, hotels, housing and convention complexes on prime sites to shopping malls and high-rise buildings. — Ava Kashima K. Austria, BusinessWorld