IN compliance with its mandate in the Electric Power Industry Reform Act (Epira) to divest its subtransmission assets, the National Transmission Corp. (Transco) said Tuesday it signed a deed of absolute sale with the Visayan Electric Co. Inc. (Veco) to transfer ownership of P171.75 million worth of subtransmission assets to Veco.

Subtransmission assets refer to transmission lines typically rated at 69 kilovolts (kV) and facilities directly connected to distribution utilities.

In January 2005 Transco and Veco finalized negotiations for the “contract to sell” worth P171.75 million—one of the biggest single-cash purchases since Transco’s subtransmission assets divestment program started in 2004.

Transco said the Energy Regulatory Commission (ERC) approved the sale and, as stated in the deed of absolute sale, the ownership, operation and maintenance of the sub-transmission assets will now be transferred to Veco.

Veco, on the other hand, has already paid the purchase price in full within 60 calendar days from the regulatory body’s approval.

Veco is the largest private electric utility in Southern Philippines with more than 275,000 customers in the cities of Cebu, Mandaue, Talisay and Naga, and the municipalities of Consolacion, Liloan, Talisay, Minglanilla and San Fernando in Metro Cebu.

Transco said the purchase contract signed with Veco involves 5.93 circuit-kilometers, 33 line structures, and various substation equipment connected to the Banilad-Mandaue and Banilad-Cotcot 69-kV lines.

Arthur  Aguilar, Transco president, assured power customers that subtransmission assets are duly inspected to ensure transparency and adherence to sale process guidelines issued by the ERC.

He also noted that broadening the ownership base of sub-transmission assets would present more opportunities for private-sector participation in the electric power industry.

“Transco encourages qualified private distribution utilities to acquire these lines and upgrade them to make the power system more efficient and reliable. As the new owners, they will be allowed to collect revenues directly from the operation and maintenance of these lines. It is expected that would give the new owners the incentive to continuously improve service for the end-users,” Aguilar said.

In support of Transco’s sub-transmission asset divestment initiatives, Veco has expressed its willingness to purchase all sub-transmission assets of Transco within its franchise area and even those assets beyond its franchise, in consortium with adjacent utilities.

Veco has so far signed three “contracts to sell” with Transco, with a fourth one still being finalized.

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IN compliance with its mandate in the Electric Power Industry Reform Act (Epira) to divest its subtransmission assets, the National Transmission Corp. (Transco) said Tuesday it signed a deed of absolute sale with the Visayan Electric Co. Inc. (Veco) to transfer ownership of P171.75 million worth of subtransmission assets to Veco.

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