NGCP seeks ERC’s nod to bill Luzon customers P10.64 million

By Lenie Lectura – August 1, 2019
from Business Mirror

THE National Grid Corp. of the Philippines (NGCP) is seeking regulators’ approval to recover P10.646 million in expenditures it incurred after Tropical Depression Josie struck Luzon last year.

The NGCP said it spent P10.646 million for the repair, restoration and rehabilitation of its damaged transmission assets. Of the total amount, capital expenditure reached P8.688 million while operating expenses amounted to P1.937 million.

In an 11-page application, it asked the Energy Regulatory Commission (ERC) to immediately grant provisional authority to implement and bill the force majeure (FM) pass-through amounts to its Luzon customers. The grid operator proposed to recover the amount starting October this year until December 2020, or until such time that the P10.646 million is fully recovered.

Specifically, it proposed that Luzon customers pay an additional P0.13 per kilowatt-hour (kWh) every month from October to December 2019 and P0.01 per kWh every month in 2020. NGCP said the timely implementation of the FM pass-through amounts will allow the equal implementation of, or even spread, the increases or decreases in tariffs from the initial implementation of cost recovery.

The grid operator is allowed to recover the cost incurred for the repair, restoration and rehabilitation of its transmission facilities damaged as a result of a FM event. The FM pass-through amount does not breach the FM threshold amount of P0.0366 per kWh, it added.

During the onslaught of tropical depression Josie on July 22, 2018, NGCP’s Olongapo substation was damaged. The grid operator was forced to shut this down due to the continuous rise of floodwater inside the substation control room and switchyard to prevent further damage.

“It must be emphasized that the rehabilitation of the assets damaged by the FM event required capital infusion, the recovery of which should be allowed immediately in order to avoid any financial strain in the operation of NGCP and to allow continuous provision of transmission services to the grid customers,” it said.