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THE
National Power Corp. (Napocor) has promised to heed the
call of the Energy Regulatory Commission (ERC) to
explain why it has not filed for the Generation Rate
Adjustment Mechanism (GRAM) and Incremental Currency
Exchange Rate Adjustment (Icera) for the period July
2006 to March 2008, and denies there are any
overrecoveries made during the period.
In a
statement, Napocor said on Friday it is actually set to
file for the 9th GRAM and 8th Icera, and is just
awaiting the approval of the National Power Board (NP
Board), its governing body.
“We have
always been compliant with all orders, resolutions,
policies and statutes, not only those that arise from
the ERC, but from all government agencies that monitor,
regulate and control our operations,” Napocor said.
The
filing for the ninth GRAM and eighth Icera covering the
period July to December 2006 is seen to result in
rebates to
Luzon customers of about P0.4047 per kilowatt-hour (kWh) and to
its
Mindanao
customers of about P0.0039/kWh, the statement added.
Napocor
said that contrary to what the ERC order claims, there
are no overrecoveries for the period mentioned. “What we
have instead, because of our increased efficiencies,
optimized generation mix and strong performance by the
peso against the dollar, are savings which we now intend
to plow back to our Luzon and Mindanao customers,”
Napocor said.
It
explained, as well, that a different situation prevails
in the Visayas. “There are no other sources of
electricity in the Visayas other than the geothermal
plants in Negros and Leyte, and land-based diesel power
plants, which comprise a big chunk of the generation
mix. The combined GRAM and Icera, if approved by the ERC,
will result in an upward adjustment of P0.1591/kWh,”
Napocor said.
Meanwhile, it traced the delays in the filing for the
9th GRAM and 8th Icera to the ERC’s decision for the 8th
GRAM and 7th Icera, which were rendered only last
December 2007, eight months after such petitions were
filed—or contrary to ERC procedures mandating the ERC to
decide on such applications no more than 45 days after
their filing.
The GRAM
and Icera are ERC-approved adjustment mechanisms that
cover a utility’s expenses for purchased power, fuel
costs and foreign-exchange fluctuations. They are
revenue-neutral, which means that the utility, like
Napocor, does not earn any revenue from its
implementation.
“These
are expenses that Napocor has already advanced and made.
Unlike other utilities such as power distribution
utilities and electric cooperatives, where the
collection from their customers of these adjustments are
automatic, it takes Napocor at least one year before it
can collect or provide rebates from these adjustments
because it still has to file for their applications
before the ERC,” Napocor said.
The ERC
earlier directed Napocor, in a show-cause order, to
explain its failure to file its GRAM and Icera for the
period of July 2006 to March 2008.
The ERC
has estimated a deferred-accounting adjustment (DAA) of
P10 billion that translates to a P0.20/kWh overrecovery
for the said period.
“Napocor’s nonfiling of their GRAM and Icera
applications is a violation of Sections 5 of both
Implementing Rules for the GRAM and for the Icera. The
ERC hopes the NPC will take expedient action on this
matter to safeguard public interest,” ERC
Officer-in-Charge Alejandro Z. Barin said.
Section
5 of the implementing rules for the GRAM requires a
utility to file a deferred generation cost accounting
application, setting forth its calculations of the
generation rate. On the other hand, Section 5 of the
implementing rules for the Icera directs a utility to
file a currency-exchange accounting application setting
for its calculation of the Icera.
GRAM
allows the periodic adjustment to the generation rate to
reflect changes in fuel and purchased power costs after
a review by the ERC before costs are passed on to
electricity consumers. Icera allows the periodic
adjustment to the foreign exchange to reflect the
changes in currency exchange after review by the ERC,
before said changes are passed on to electricity
consumers. |
