Maharlikanism Maharlikanism
Rule 6

Definition of Policy

September 30, 2021 7 minutes  • 1333 words
Table of contents

RULE 6. TRANSMISSION SECTOR

Section 1. Guiding Principle

The transmission of electric power shall be a regulated common electricity carrier business, subject to the ratemaking powers of the ERC.

Section 2. Scope of Application

This Rule shall apply to TRANSCO or its Buyer or Concessionaire and any other successor-in-interest thereto.

Section 3. Ownership Limitation

The TRANSCO or its Buyer or Concessionaire or any of its stockholders, directors, officers or any of their relatives within the fourth civil degree of consanguinity or affinity, legitimate or common law, shall not hold any interest, whether directly or indirectly, in any Generation Company, Distribution Utility, IPP Administrator and Supplier.

Section 4. Separation Between Transmission and Subtransmission.

The ERC shall set the standards of the transmission voltages and other factors that shall distinguish transmission assets from Subtransmission Assets.

Towards this end, ERC shall issue appropriate guidelines to distinguish between these categories of assets according to voltage level and function. The ERC shall take into account the objective of allowing non- discriminatory Open Access to the transmission and Subtransmission Systems.

The technical and functional criteria to be considered in distinguishing transmission assets from Subtransmission Assets shall include, but not limited to: (a) Subtransmission Assets are normally in close proximity to retail customers; (b) Subtransmission Assets are primarily radial in character; (c) Power flows into Subtransmission Assets; it rarely, if ever, flows out; (d) When power enters Subtransmission Assets, it is not reconsigned or transported on to some other market; (e) Power entering Subtransmission Assets comparatively restricted geographic area; (f) Meters are based at the interface of transmission and Subtransmission Assets to measure flows into the Subtransmission Assets; and (g) Subtransmission Assets will be of reduced voltage. is consumed in a

Section 5. Initial Classification of Transmission Assets.

Pending the issuance of the new standards for classification of transmission assets by ERC, transmission assets shall be defined as follows:

  • For the Luzon Grid, transmission facilities rated 230 kV and above shall generally be considered transmission assets; (b) For the Visayas Grid, transmission facilities rated 69 kV and above shall generally be considered transmission assets; (c) For the Mindanao Grid, transmission facilities rated 138 kV and above shall generally be considered transmission assets; and (d) Notwithstanding the foregoing provisions, any line at the specified level for each Grid that serves an End-user or customer shall be considered a subtransmission line, and any line below the specified Page 24 of 100level for each Grid that serves a transmission function shall be considered a transmission line. Section 6. Initial Classification of Subtransmission Assets. Step-down transformers used solely by load customers are considered Subtransmission Assets. . In the case of step-down transformer banks serving a single Distribution Utility, the Distribution Utility or DUs shall have the option to purchase said facility, provided, it will guarantee the reliable Supply of Electricity to grid control equipment. Section 7. Functions and Responsibilities of TRANSCO or its Buyer or Concessionaire. The TRANSCO or its Buyer or Concessionaire shall have, among others, the following functions and responsibilities: (a) Act as the system operator of the nationwide electrical transmission and Subtransmission System, transferred to it by NAPOCOR; (b) Provide open and non-discriminatory access to its system to all electricity users; (c) Ensure and maintain the reliability, adequacy, security, stability and integrity of the Grid in accordance with the performance standards for the operation and maintenance of the Grid, as set forth in the Grid Code and the Distribution Code. The performance indicators for reliability, security, adequacy, integrity and stability shall include but are not limited to the following: (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (ix) (x) Number of Interruption Events; Sustained Average Interruption Frequency Index; Momentary Average Interruption Frequency Index; Sustained Average Interruption Duration Index; System Interruption Severity Index; Frequency of tripping per 100 c-km; Average Forced Outage Duration; Accumulated Time Error; Frequency Limit Violation; and Voltage limit Violations.

(d) Improve and expand its transmission facilities, consistent with the TDP and the Grid Code, to adequately serve Generation Companies, DUs and Suppliers requiring transmission service and/or Ancillary Services through the transmission system. TRANSCO or its Buyer or Concessionaire shall submit any plan for expansion or improvement of its facilities for approval by the ERC (e) Provide Central Dispatch, through its grid operator, to all Generation Facilities and loads connected, directly or indirectly, to the Page 25 of 100transmission system in accordance with the dispatch schedule submitted by the Market Operator, taking into account outstanding bilateral contracts and subject to Technical Constraints.

Section 8. Obligations of TRANSCO.

The TRANSCO shall have, among others, the following obligations: (a) Prepare the TDP in consultation with Electric Power Industry Participants. (b) Submit an updated TDP for approval to the DOE on a timely basis each year for integration with the PDP and PEP. (c) Remit its net profit, if any, to the PSALM not later than ninety (90) days after the immediately preceding quarter subject to annual reconciliation when the audited and certified annual financial statements are finally made available. Net profit is defined as: Net Profit = Total Utility Revenue – (Total Operating Expenses - Other Income + Interest & Other Charges) Net proceeds from the Privatization of TRANSCO shall be immediately remitted to PSALM. (d) TRANSCO shall secure approval of its Transmission Charges from the ERC pursuant to Section 43(f) . (e) TRANSCO shall sell its Subtransmission Assets to qualified DUs pursuant to the Act and, Part IV, Section 13 of Rule 22 on National Transmission Corporation. In the event that a Distribution Utility is not qualified or a qualified Distribution Utility refuses to acquire such assets, then TRANSCO shall be deemed in compliance with this obligation. The Buyer or Concessionaire shall be responsible for the obligations under Subsections (a), (b), and (d) hereof. Section 9. Compliance with Grid Code.

TRANSCO or its Buyer or Concessionaire shall comply with the provisions of the Grid Code in the process of improving and expanding its transmission facilities in order to ensure and maintain the reliability, adequacy, security, stability and integrity of the Grid and adequately serve Electric Power Industry Participants requiring transmission service or Ancillary Services through the Grid.

Section 10. Transmission Development Plan

(a) The TDP refers to a plan for managing the transmission system through efficient planning for expansion, upgrading, rehabilitation, repair and maintenance, to be prepared and implemented by TRANSCO or its Buyer or Concessionaire. Page 26 of 100(b) TRANSCO or its Buyer or Concessionaire shall be responsible for the preparation of the TDP, in consultation with the Electric Power Industry Participants. TRANSCO or its Buyer or Concessionaire shall submit the TDP for approval by DOE for integration into the PDP and PEP.

(c) Any plan for expansion or improvement of transmission facilities shall be approved by the ERC: Provided, That such approval shall not be unreasonably withheld.

Section 11. TRANSCO Related Businesses.

The TRANSCO or its Buyer or Concessionaire shall be primarily responsible for maintaining and operating the Grid pursuant to this Rule. (a) TRANSCO or its Buyer or Concessionaire may engage in any related business which maximizes utilization of its assets; (b) A portion of the annual net income of not more than fifty percent (50%) derived from such undertaking utilizing assets which form part of the rate base shall be used to reduce the transmission wheeling charges as determined by ERC; and (c) Separate audited accounts shall be maintained for each business undertaking to ensure that the transmission business shall neither subsidize in any way such business undertaking nor encumber its transmission assets in any way to support such business. Section 12. Transmission Charges. (a) Transmission Charges shall be paid to TRANSCO or its Buyer or Concessionaire for the use of the transmission system. Transmission users shall also pay charges for the use of Ancillary Services. The WESM Rules shall provide for the methodology for the price and cost recovery of Ancillary Services that are to be provided by the Generation Company.

(b) Transmission Charges and fees for Ancillary Services shall be fixed by the ERC.