NPC, Meralco agreed on P14.3-B settlement deal, ERC records show
Thursday, May 04, 2006
By MYRNA M. VELASCO
Records provided by the Energy Regulatory Commission (ERC) have shown that state-owned National Power Corporation (NPC) and Manila Electric Company (Meralco) agreed on the P14.319-billion adjusted settlement cost for their terminated 10-year power supply contract.
In a joint compliance filing made by the two firms with the ERC, they explicitly stated that "Meralco and NPC hereby submit the (attached) computation of the final reconciled settlement amount equivalent to P14,319,949,324.00."
As could be gleaned from the documents, the revised computation was made and attested to by Meralco senior manager Ciprinilo C. Meneses and NPC Corporate Staff Officer B Cynthia R. Encarnacion; and submitted for compliance by the legal counsels of both parties.
The documentary evidence obtained from ERC hit back at NPC president Cyril C. del Callar’s earlier statement; when he said that they were not even asked by the Commission to comment on the adjusted settlement amount.
The NPC chief executive has also stressed that their position never changed since the filing of the first P20-billion net settlement; but the ERC filings made this year proved such claim otherwise.
Meanwhile, Meralco president Jesus P. Francisco clarified that there was never an intention on their part to set aside the settlement deal; but at this point, discussions have already been concluded between them and NPC; thus, it now lies on ERC to render a final ruling on the matter.
It has been emphasized that the NPC-Meralco final settlement amount was computed pursuant to Clause 1.3 of their initial deal dated July 15, 2003.
That particular provision in the settlement agreement states that: "Meralco’s actual monthly offtake from NPC shall be reckoned against baseline quantities (that are set forth in Annex C). In case of Meralco’s inability to source energy from NPC at the baseline quantities other than those set forth in Section 2.2.
(i.e. force majeure, strikes, etc.), there will be an upward adjustment to the settlement amount due for that billing period."
It has been prescribed that this shall be computed at P1.51 per kilowatt hour (kWh) only multiplied to the difference between the baseline quantity and the actual Meralco offtake.
However, in cases where Meralco procures from NPC more than the baseline quantity of a particular billing period, there will be a corresponding reduction in the settlement amount.
It was culled from records that since July 2005 until the expiration of their contract to supply electricity (CSE) in December 2004, Meralco has been buying more from NPC as compared to the prescribed baseline quantities; thus, the reduction in net settlement amount.
The revised joint filing for P14.3 billion is now pending for decision by the regulatory body.
Once approved, there have been pronouncements previously made that electricity rates paid for by Meralco consumers will be reduced; given that its contracted independent power producers will also be run at minimum energy quantity or at their contract levels. (MMV
posted by philpower @ 7:27 AM,
