THE Provincial Board of Benguet is keen on opposing the National Grid Corporation of the Philippines’ (NGCP) force majeure pass-on costs amounting to P327.52 million.
During the provincial board meeting on Monday, June 18, the NGCP explained the amount was incurred by the company caused by the damages brought by Typhoon Nina.
NGCP asked the Energy Regulatory Commission (ERC) to declare the typhoon as a force majeure event after it damaged its transmission assets and facility.
The provincial board said the recovery of the damages remain unreasonable and will strongly burden its customers in Luzon and Benguet province.
The charges must be considered as operational loss and not be passed to the consumers.
During the session, current Philippine Councilor’s League Benguet chapter president and Board Member Nestor Fongwan Jr. added they are now eyeing their next move to oppose the application of NGCP to ERC.
“We would take this up to ERC. We would file a resolution opposing the application of NGCP to ERC,” added Fongwan.
NGCP Tariff and Billing Management Division manager Agnes Dela Cruz said since 2009, there were two applications approved by ERC as force majeure event (FME), the two approved as explained earlier recovered was return of capital. However as of 2015, the company stopped to collect recovery cost.
Board Member Juan Nazarro asked for a specific provision of the law that allows the company to recover due to calamities and natural resources.
Article 10 of rules for setting distribution of wheeling rates anchored for privately owned electricity distribution utilities operating was mentioned as the legal basis of the company’s application of the FME pass through.
Dela Cruz justified the company needs to recover the actual expenses incurred for the repair, restoration and rehabilitation of the damaged transmission assets and other related facilities since the cost of rehabilitation of the damaged assets was due to an FME not included in the capital expenditure program of the company.
“The rehabilitation of the assets damaged by the FME, Typhoon Nina required capital inclusion. 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 customers of the grid,” the company stated.
NGCP said the timely implementation of the FME pass on will allow the equal spread of the increases or decreases in tariffs from the initial implementation of the recovery cost.
Dela Cruz added the FME claim was filed in December 22 last year.
Several local government units like Mountain Province, Cagayan, Atok, Nueva Vizcaya, Cavite, Rizal, Camarines Norte, Marinduque, Kabayan, Mankayan, Sablan, Bakun and Pangasinan called their support of the previous resolution of the provincial board asking the NGCP of its full disclosure of its application.