ERC issues new CPCN to VECO
The
Energy Regulatory Commission (ERC) approved the issuance to the Visayan Electric
Company (VECO) on 26 January 2009 of a new Certificate of Public Convenience
and Necessity (CPCN) that is valid from 24 September 2005 until 24 September
2030. The CPCN is the authorization issued by the ERC to entities engaged in
the operation of a transmission or distribution system for which a franchise
is required by law.
On 08 December 2003, VECO was granted a franchise by the National Electrification
Commission (NEC) which had the power to issue a franchise during that time.
In its Decision in Case No. 2000-08, VECO was authorized to continue operating
the electric, light and power system in 3 cities (Cebu, Mandaue and Talisay)
and 5 towns (Consolacion, Liloan, Minglanilla, Naga and San Fernando), all in
the Cebu province. The franchise was effective from 08 December 2003 to 07 December
2028. VECO consequently applied for a CPCN at ERC under ERC Case No. 2003-563
that was approved to have the same validity period as the franchise issued by
the NEC.
The passage of Republic Act. No. 9136 or the Electric Power Industry Reform
Act (EPIRA) in 2001 transferred the exclusive power to grant a franchise from
the NEC to Congress. Thus, VECO was given by Congress a new franchise on 01
September 2005, which is valid until 24 September 2030. This led VECO to file
before the ERC an application on 24 October 2008 under ERC Case No. 2008-095
MC in order for the expiration of its CPCN to coincide with the expiration of
its franchise granted by Congress.
VECO’s application was evaluated by the ERC based on the Rules to Govern
the Issuance of Certificate of Public Convenience and Necessity (CPCN) to Entities
Engaged in the Transmission and Distribution of Electricity that were adopted
in ERC Resolution No. 5, series of 2008.
In acting on the application of VECO, the ERC noted the projects implemented
by VECO to improve the efficiency and reliability of its System. Some of these
projects are: (1) the development of a looped 69 kV backbone system; (2) installation
of a 69/23 kV substation to provide sufficient capacity in ensure that the present
and future demand for electricity service are met; (3) acquisition of a mobile
substation transformer; and (4) establishment of the VECO system Control Center
(VSCC) with Supervisory Control and Data Acquisition (SCADA) facilities and
Wide Area Network (WAN) communication.
VECO’s financial statements also showed that it has the financial capability
to viably operate and sustain a reliable electricity service to its consumers
in the cities and municipalities under its franchise area.
“The ERC carefully monitors the operational, technical and financial performances
of DUs to ensure that the consumers will enjoy a stable and adequate supply
of electricity at the least cost possible,” ERC Chairperson Zenaida G.
Cruz-Ducut stated.
February 3 , 2009