GRID BRIDGE: New DOE, ERC rules may hasten Panay-Luzon power link

By Francis Allan L. Angelo

A new regulatory framework from the Department of Energy (DOE) and the Energy Regulatory Commission (ERC) has opened a pathway that could advance the long-deferred Batangas-Mindoro-Panay transmission corridor by at least a decade, according to a policy note released in July 2026 by the Institute of Contemporary Economics (ICE).

The policy note, titled “The Quiet Transmission Opening,” said the Mindoro-Panay 230-kilovolt (kV) Interconnection Project, which current transmission planning places in the 2041 to 2050 horizon, could potentially be delivered around 2030 if a viable proposal is approved within the next few years.

Industry sources cited in the note indicated that the Mindoro-Panay gateway could be completed within roughly three years from approval of a viable proposal, although ICE stressed that the estimate is an indicative delivery assumption and not an official government, TransCo, ERC, or National Grid Corporation of the Philippines (NGCP) commitment.

The opening stems from two issuances. In February 2026, the DOE issued Department Circular No. DC2026-02-0007, a policy framework allowing the National Transmission Corporation (TransCo) to finance or construct transmission lines and facilities critical to the country’s energy transition.

The DOE said the circular designates TransCo as the primary authority to undertake the planning, financing, and construction of Priority Projects, and allows it to engage government agencies, government-owned or -controlled corporations, financial institutions, or qualified private entities for implementation.

In June 2026, the ERC followed with Resolution No. 18, Series of 2026, which established implementing rules for point-to-point limited transmission facilities and for the financing and construction of transmission projects by entities other than the transmission network provider.

Together, the issuances create a pathway for Priority Projects to be financed or constructed outside NGCP’s ordinary project sequence, while keeping the facilities subject to public designation, regulatory review, technical integration, turnover discipline, and cost-recovery rules, the note said.

TransCo is the government-owned corporation that owns the national transmission assets, while NGCP is the private concessionaire and franchise holder that operates, maintains, expands, and develops the grid.

During the concession period, most transmission construction has moved through NGCP’s project pipeline.

ICE said the framework does not cancel the NGCP concession, create a parallel grid operator, or allow private groups to build transmission lines outside national-grid discipline.

It described the change as a controlled opening that introduces contestability at the delivery layer while preserving public-interest safeguards.

For Panay, the ICE note said the implication is direct and time-sensitive. A completed Batangas-Mindoro-Panay corridor would give the island a second strategic connection to the national grid through Mindoro and Batangas, reducing exclusive dependence on the eastern route through Leyte, Cebu, and Negros.

The Batangas-Mindoro segment is already advancing as a major 500-kV interconnection and backbone project in national transmission planning, while the Mindoro–Panay connection that would complete the western route remains in the distant planning horizon.

The note traced Panay’s transmission exposure through recent events, including the 2024 Panay blackout, the deliverability questions that followed the completion of the Cebu–Negros–Panay (CNP) 230-kV backbone, and the Manual Load Dropping (MLD) events that hit Iloilo consumers in June 2026.

NGCP energized Stage 3 of the CNP backbone in April 2024, increasing transfer capacity among Panay, Negros, and Cebu.

ICE said the backbone improved Panay’s connection to the Visayas Grid but cautioned that receiving, step-down, and downstream limits, including the 230-kV to 138-kV transfer at Barotac Viejo, can still constrain how much power actually reaches load centers.

The June 2026 MLD events, the note said, showed that interruptions can appear locally on Iloilo feeders even when the deficiency sits upstream in grid-level stress, thin reserves, transmission deliverability, or reduced inter-grid support.

Beyond reliability, ICE said a western corridor would change the commercial logic of generation in Panay by giving power produced on the island a stronger path to Luzon, the country’s largest demand center.

The island could then be evaluated as a generation-export platform serving both the Visayas and Luzon grids, rather than only as a western-end Visayas load area.

The note laid out six policy actions for Panay stakeholders. These include requesting the DOE and TransCo to evaluate whether the Mindoro-Panay segment, or the integrated corridor, qualifies for Priority Project treatment, and asking TransCo to prepare a preliminary project-delivery package covering scope, routing, submarine-cable segments, landing points, substations, cost range, and cost-recovery treatment.

It also called on the ERC to clarify how transmission projects financed or constructed by non-NGCP actors will be treated for prudency review, asset valuation, recovery period, performance obligations, turnover, and integration into the regulated network, saying regulatory clarity will determine whether the framework becomes a bankable project pipeline or remains an unused legal possibility.

ICE further recommended that Panay prepare an investment and readiness map identifying realistic generation zones, storage opportunities, grid-facing industrial sites, port and logistics support points, landing areas, substation needs, downstream distribution upgrades, land-use constraints, environmental risks, and right-of-way issues.

The regional response, it said, should be coordinated through existing institutions, including provincial and city governments, investment promotion and planning offices, distribution utilities, generation developers, port authorities, the DOE, TransCo, NGCP, and the ERC, with a common regional position paper and technical annex as the coordinating output.

ICE cautioned that acceleration should not be presented as an exemption from regulatory discipline, noting that any accelerated project must still pass prudency review, technical integration, environmental assessment, right-of-way scrutiny, and cost-recovery evaluation.

The think tank commended the DOE and the ERC for the posture shift, saying the government is no longer limited to reviewing plans, processing approvals, convening hearings, requiring reports, and pressing NGCP to complete delayed projects, and now holds a defined delivery instrument for critical transmission facilities.

“The issue is not another ad hoc response to the next alert, curtailment, or interruption. It is whether Panay can bring forward a durable correction to the transmission geography that has constrained its reliability, generation scale, and access to Luzon demand,” the note read.