NGCP wants to recover P1.56 million used to repair assets destroyed by Typhoon Ineng

by Lenie Lectura - August 23, 2016

http://www.businessmirror.com.ph/2016/08/23/ngcp-wants-to-recover-p1-56-million-used-to-repair-assets-destroyed-by-typhoon-ineng/

THE National Grid Corp. of the Philippines (NGCP) wants to recover P1.56 million worth of additional “force majeure” capital expenditure (FM capex) for the repair and restoration of its transmission assets damaged by last year’s tropical storm Ineng in Luzon.

In an eight-page application filed with the Energy Regulatory Commission (ERC),  the grid operator proposed to collect a total of P1,561,298.74 over a four-year period starting September this year.

“The NGCP proposes the FM pass-through amount as additional network charges in Luzon starting the billing period of September 2016 to December 2020, or until such time that the amount incurred is fully recovered,” NGCP said.

In particular, an amount of P0.055 per kilowatt-hour-month would be collected in 2016 and P0.002 per kWh-month in the years 2017 to 2020. NGCP said 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 to recover the cost.

The proposed FM pass-through amount did not breach the FM threshold amount of P0.0341 per kWh, the NGCP said. “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 FM in Luzon required capital infusion, the recovery of which should be allowed immediately in order to avoid any financial strain in the operation of NGCP and to allow the continuous provision of transmission service to the grid customers,” NGCP said in its application.

The NGCP also asked the ERC to approve the recovery of the net fixed-asset value of the transmission assets and other related facilities damaged by the storm amounting to P1,578,209.42, “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 FM Typhoon Ineng.”

The NGCP is allowed to recover the cost it incurred in the repair, restoration and rehabilitation of its transmission assets damaged by tropical storms. Ineng entered the Philippine Area of Responsibility with maximum winds of 180 kilometers per hour. Due to its rains and gusty winds, NGCP’s transmission assets and other related facilities in the Luzon area were damaged, causing widespread power interruption in the area.

The NGCP said it started the repair, restoration and rehabilitation of its damaged transmission assets and other related facilities in order to restore transmission service to its customers and the public.

As a result, the NGCP incurred additional costs for the repair, restoration and rehabilitation of the damaged transmission facilities.