NGCP Recovering ‘Typhoon Damage’ Costs

Transmission firm National Grid Corporation of the Philippines (NGCP) has secured regulatory approval for it to pass on some P134.509 million worth of 'force majeure costs" resulting from the typhoon damages as well as "sabotage" acts wrought on its facilities.

The company has been directed by the Energy Regulatory Commission (ERC) to pass on these costs for three years - or from 2013 to 2015 - to its load customers in the Luzon and Mindanao grids.

For Luzon, the amounts to be billed will be P0.42632 per kilowatt (kW) for 2013; P0.40663 per kW in 2014; and P0.38866 per kW in 2015. It will account for costs due to facility damages with the onslaught of super typhoons Ondoy and Pepeng in 2009.

For Mindanao customers, the cost recovery will be for 'sabotage' done on its assets. The pass-on rates will be: P0.00687 per kW for 2013; P0.00659 per kW for 2014; and P0.00632 per kW for 2015.

"NGCP is authorized to collect the following additional charges from its Luzon and Mindanao grid customers in addition to its approved maximum allowable revenue (MAR)," the ERC has emphasized.

It must be recalled that the company was granted a revenue cap of roughly P45 billion this year; of which cost impact was actually 'softened' for the end-users.

The ERC has stipulated that "the transmission network facilities damaged by typhoons Ondoy and Pepeng and sabotage in Mindanao shall be executed from the regulatory asset base of NGCP starting the fourth regulatory period."

But while the regulatory body permitted the specified cost recoveries, it enjoined NGCP to "explore self-insurance and other modes of insurance to mitigate the impact of calamities on its rates."

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