Business Mirror
Published on Monday, 29 April 2013 19:50 Written by Lenie Lectura / Reporter
THE Power Sector Assets and Liabilities Management Corp. (PSALM) said on Monday the Energy Regulatory Commission (ERC) erred when it modified last month’s ruling which adopted Manila Electric Co.’s (Meralco) own computation.
“The ERC, in its new ruling, adopted the straight discount method that Meralco proposed by deducting outright the 2.98 percent from the National Power Corp. [Napocor] time-of-use [TOU] rates. This method failed to consider the fact that the line loss component of the Napocor-TOU rate is not analogous to the actual line loss imposed by the Philippine Electricity Market Corp. [PEMC], as they differ in terms of meter location,” PSALM President Emmanuel R. Ledesma Jr. said.
The PSALM official said the state firm will file a motion for reconsideration on the March 4 order of ERC on the transmission line-loss double charging case filed by Meralco.
PSALM said the methodology adopted by ERC deviated from the March 10 decision, which was final and executory.
“The ERC originally ordered PEMC to provide Napocor/PSALM its segregated line rental amounts for the transition supply contract [TSC] quantities from the start of the Wholesale Electricity Spot Market [WESM] to compute the accurate amount of the refund. The line loss imposed by PEMC is bundled together with line congestion, which PEMC charges its customers as line rentals,” Ledesma explained.
In a motion for reconsideration issued on June 10, 2010, PEMC manifested that the segregation of line rental is not feasible. Thereafter, the ERC issued an order dated March 7, 2011 requiring PEMC to submit an alternative method of segregation. To date, PEMC has not submitted data on the segregation of its line rental trading amounts.
“Thus, no breakdown is available as to the allocation of the bundled rate between the two components to determine how much PEMC is really charging for the line loss. It is for this reason that the ERC adopted Meralco’s straight deduction method,” Ledesma said.
But the PSALM official pointed out that ERC’s previous ruling cannot be modified merely on the basis that one of the parties will be inconvenienced by its implementation.
“The March 10, 2010, decision is final and executory. Hence, any modification to this ruling is considered null and void,” Ledesma said.
PSALM also pointed out that deducting the 2.98-percent line loss from the Napocor-TOU amount effectively reduces the basic generation charge revenue requirement of the grid because the line loss in the Napocor-TOU rates differs in terms of reference points in relation to the line-loss component of the line rental.
“PSALM, as a government-owned and -controlled entity, can neither forego its revenues nor refund government funds merely on the basis of practicality and convenience of a party due to the delay of such party in submitting the required data necessary to implement the decision, particularly if the alleged double recovery was not due to PSALM’s fault but the effect of simultaneous implementation of the Napocor-TOU rates and the price determination methodology [PDM] in the WESM, both of which are ERC-approved,” Ledesma said.
PSALM, he further said, continues to be bound by the TSC and the PDM as both remain valid until today. Therefore, PSALM cannot deviate from either until an effective segregation mechanism from PEMC is approved by the ERC.
PSALM also noted that the first computation that Meralco submitted for line losses amounted to P9 billion based on the 2.89-percent rate. In the ERC’s latest ruling, the share of successor generation companies in line losses was considered, thereby reducing the amount of line loss to be recovered from PSALM/Napocor to P5.1 billion.
“As PSALM and Napocor are not privy to the computations of Meralco and considering that the figures are not fixed, the credibility of the figures cannot be established despite the significant reduction from the original amount that Meralco submitted,” Ledesma said. source
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