NGCP seeks clearance to recover P10 M from end-users

By Danessa Rivera – August 5, 2019
from The Philippine Star

MANILA, Philippines — The National Grid Corp. of the Philippines (NGCP) is seeking clearance to recover over P10 million from electricity end-users in Luzon to cover repairs of transmission facilities damaged by Typhoon Josie last year.

NGCP has filed an application with the Energy Regulatory Commission (ERC) to declare the flood due to Tropical Depression Josie in July last year as a force majeure event (FME).

The power regulator is seeking the collection of force majeure (FM) pass-through costs from customers in Luzon.

The grid operator said during the onslaught of Tropical Depression Josie, Olongapo experienced flash floods which damaged its Olongapo substation.

The floods caused the substation’s perimeter wall to collapse, the switchyard to be covered in mud and debris, and transformers and spare equipment submerged in water.

“NGCP was forced to shut down Olongapo substation due to the continuous rising of flood water inside the substation control room and switchyard and to prevent further damage to affected assets and facilities and electrocution of personnel,” it said.

Immediately after the typhoon hit, NGCP started the repair, restoration and rehabilitation of the damaged transmission asset to restore transmission services to customers, incurring P10.62 million in capital expenditure and operating expenditures.

Meanwhile, the recoverable value or the net fixed asset value (NFAV) of the assets destroyed by the tropical depression is equivalent to P20 million.

NGCP is seeking approval to recover a total of P10.65 million from Luzon customers from October 2019 to December 2020, or until the amount is fully recovered.

The grid operator is looking to charge an additional P0.13 per kilowatt (kw) a month in 2019, P0.01 per kw a month in 2020. In terms of per kilowatt-hour, this is equivalent to P0.00026 per kwh in 2019, and P0.00002 per kwh in 2020.

NGGP said it needs to immediately recover the actual expenses incurred for the repair, restoration and rehabilitation of the damaged transmission assets and other related facilities to allow the continuous provision of transmission service to the grid customers.

Under the rules for the setting of transmission wheeling rates, NGCP is allowed to recover the cost it incurred for the repair, restoration and rehabilitation of its transmission assets and other related facilities damaged by the FMEs including typhoons.