Transmission
The Philippines ’s Electric Power Industry Reform Act segregated the generation and transmission assets of National Power, which retained the operation and maintenance functions of the power plants until these are sold. A separate corporate entity, the National Transmission Corporation (TransCo), was created to operate and maintain the transmission assets.
Because of issues related to imminent domain and right-of-way, the Philippine government opted not to auction the transmission assets. Instead, these assets are being offered in the form of a 25-year concession, with the possibility of renewal for another 25 years. Under this arrangement, the government, through PSALM, will retain the ownership of TransCo’s assets.
PSALM will conduct an open, competitive bidding for the transmission facilities, which will include grid interconnections and ancillary services. The winning bidder will be responsible for improving, expanding, operating and maintaining these assets, and operating any related business.
This arrangement is envisioned to generate maximum proceeds for the national government and at the same time, offer good returns for the investor.
The concessionaire will be governed by the Grid Code which was formulated by the Energy Regulatory Commission and the Transmission Development Plan as approved by the Department of Energy.
The following are among the applicable laws governing the TransCo privatization:
- The EPIRA, Republic Act No. 9136, is the principal law guiding PSALM in implementing the privatization of the transmission facilities of National Power.
- The Philippine Constitution (primarily Article XII, Section 11) on franchises for the operation of a public utility.
- Other relevant sections of the EPIRA and pertinent rules of the Commission on Audit (COA) regarding the disposal of government assets.
- The Government Procurement Reform Law, RA No. 9184, in relation to Executive Order No. 109-A as amended, is also used as reference in so far as these laws provide for the mode of awarding government contracts
