TRANSCO bidders assured of transparent regulation - ERC

The Energy Regulatory Commission (ERC) assured prospective TRANSCO (National Transmission Corporation) bidders of a transparent and stable regulatory regime. In a recently concluded forum organized by the Power Sector Assets and Liabilities Management (PSALM), ERC Commissioner Rauf A. Tan disspelled fears of regulatory risk in the privatization of TRANSCO. “The ERC hereby assures all interested parties that the rules will not be whimsically changed,” Comm. Tan guaranteed.

The PSALM earlier deferred the TRANSCO bidding originally scheduled on 22 January 2007 to the first week of February 2007 to provide bidders more time to thresh out legal and commercial concerns in order to come up with a win-win scenario for both the government and the prospective investor through a sustainable long-term concession contract.

Section 21 of the EPIRA (Electric Power Industry Reform Act), entitled TRANSCO Privatization, directs PSALM to award, in open competitive bidding, the transmission
facilities, including grid interconnections and ancillary services to a qualified party either through an outright sale or a concession contract. The winning buyer/concessionaire will be responsible for the improvement, expansion, operation, and/or maintenance of the transmission assets and the operation of any related business. In case a concession contract is awarded, the concessionaire will have a contract period of twenty-five (25) years, subject to review and renewal for a maximum period of another 25 years.

“The electric power industry participants can rely on ERC as a fair and reasonable regulator which ensures a level playing field for all the stakeholders,” Comm. Tan concluded.

January 31, 2007