ERC to allow recovery of TransCo’s costs due to force majeure events
Thursday, December 14, 2006
By MYRNA M. VELASCO
The Energy Regulatory Commission (ERC) indicated that it will allow National Transmission Corporation (TransCo) to recover costs incurred due to force majeure (FM) events, such as the unrelenting damage on its facilities during strike of calamities.
The charges, will be referred to as the FM pass through amount, and will be determined based on the Guidelines on the Methodology for Setting Transmission Wheeling Rates.
"This will be in addition to the ERC-approved maximum allowable revenue," the regulatory body has stressed.
TransCo president Arthur Aguilar previously said that the amount to be recovered might be in the range of P0.01 to P0.02 per kilowatt hour.
The transmission firm is eyeing to file a Notice for Force Majeure Event for the recovery of costs set for the repairs and restoration works on transmission infrastructure damage by super typhoons Milenyo and Reming.
Events such as typhoons, earthquakes and other natural calamities are ‘acts of God’ that cannot be controlled by anyone. It is not possible for TrasnCo to predict such events and incorporate the costs associated with these events in its rate proposal, hence, the ERC may allow such amounts to be recovered on top of the approved MAR," ERC Chairman Rodolfo B. Albano, Jr. has emphasized.
Article 10 of the TWRG enables TransCo to seek ERC’s approval for force majeure pass through amount.
"It is up to the ERC to decide the merits of the application, the eligible passthrough charge, and the period over which the passthrough charge is to be applied," the transmission firm stressed.
The transmission wheeling guidelines define force majeure events as could be in the form of typhoon, storm, or tropical depression, flood, drought, or volcanic eruption, earthquake, tidal wave or landslide which results or is likely to result in an increase in the costs incurred by a regulated entity, like TransCo, in relation to its service of transmitting electricity.
The process of seeking ERC’s approval for the recovery of force major-related costs will require the applicant to submit a notice within three months that will detail out the force majeure events triggering the loss of money.
In addition, TransCo must provide the ERC with an FM Event Claim within 12 months of the relevant event detailing the: costs incurred for the force majeure; the extent to which TransCo has the benefit of any insurance against the consequences of the force majeure event; and the FM pass through amount being proposed.
posted by philpower @ 5:36 AM,
