NGCP wants government to pay P23-million assets destroyed by Typhoon Amang in 2015

by Lenie Lectura – January 14, 2016

from Business Mirror

THE National Grid Corp. of the Philippines (NGCP) wants to recover over P23 million worth of additional Force Majeure Capital Expenditure (FME capex) for the repair and restoration of its transmission assets damaged by Tropical Storm Amang (international code name Mekkhala) in the Visayas and sabotage incidents in Mindanao last year.

In a 10-page application filed before the Energy Regulatory Commission (ERC), the grid operator said the total cost it incurred as additional FME capex stood at P23,688,697.80.

Broken down, the FME capex for the Visayas stood at P20,683,181.96 and P3,005,425.84 for Mindanao.

The sabotage incidents occurred in January last year in Maguindanao, Cotabato and Sultan Kudarat.

Amang caused widespread power interruption in the Visayas also in January 2015.

The NGCP proposes the FM pass-through amount to be collected starting February 2016 to December 2020, or until such time that the amount incurred is fully recovered.

In particular, the NGCP proposed to collect from the Visayas P0.46 per kilowatt-hour (kWh) every month this year; P0.l9/kWh in 2017; P0.15/kWh in 2018; P0.14/kWh in 2019; and P0.13/kWh in 2020.

In Mindanao, the NGCP asked the ERC to allow it to collect P0.05/kWh per month this year, P0.02/kWh in 2017 up to 2020.

The NGCP needs to immediately recover the actual expense incurred for the repair, restoration and rehabilitation of the damaged transmission assets and other related facilities.

“The occurrence of the FMEs in the Visayas and Mindanao required massive capital infusion, the recovery of which should be allowed immediately in order to avoid any financial strain in the operation of the NGCP and to allow the continuous provision of transmission service to the grid customers,” NGCP said in its application.

“In addition, the timely implementation of the FM pass-through amount will allow the equal or even spread of the increases or decreases in tariffs from the initial implementation of the recovery of the cost,” added the NGCP.

The NGCP is asking the ERC to approve the recovery of the net fixed-asset value of the transmission assets and other related facilities damaged by storm and sabotage incidents amounting to P1,049,732.95, “given that it would have been fully recovered by NGCP if these transmission assets and other related facilities have not been damaged or destroyed by FME tropical storm Amang and sabotage incidents in Mindanao.”

NGCP is allowed to recover the cost it incurred in the repair, restoration, and rehabilitation of its transmission assets damaged by tropical storms. The NGCP said it has not recovered any amount from its Industrial All-Risk (IAR) insurance policy procured from the Government Service Insurance System (GSIS) for the year 2014. “Thus, it is but proper for NGCP to file the instant FME claim application to recover the cost it incurred.”