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Monday, January 16, 2006
Energy body may cut Transco's proposed revenue hike
By Danilo V. Adorador III
THE Energy Regulatory Commission (ERC) might reduce by 40 percent the maximum allowable revenue proposed by the National Transmission Corporation (Transco) in connection with its scheduled second regulatory reset for the 2006 to 2010 period.
Transco has listed five key financial variables to justify the requested increase, one of which is the company's burgeoning operating expenditures and foreign exchange rates.
In its adjustment application currently under consideration before ERC, Transco has projected a wheeling rate adjustment of about 22 to 24 percent.
This translates to an increase of around 10, 12, 14, 16, and 18 centavos respectively for the next five years covering the second regulatory reset period--on top of the current 80 centavos transmission charge.
But in ERC's draft determination of Transco's proposed maximum allowable revenue adjustment, ERC Commisioner Rauf Tan said that around 40 percent has been slashed from the original requested increase.
Tan, however, clarified that ERC's initial appreciation of Transco's application "may still change, depending on the strength of the oppositor's case."
"The commission's draft determination is not final, of course, and it may be actually higher or lower than the 40 percent cut we initially released," he said, noting that the energy body had still two more public hearings before it will issue its decision.
He said Transco's adjustment application is expected on the first week of May this year. Final nationwide public hearings will terminate on February 24.
Oppositors and interveners attending the Cagayan de Oro leg of Mindanao's five scheduled hearings had earlier focused their case rebutting the alleged bloated forecast of Transco's financial requirements.
Councilor Jose Benjamin Benaldo of the Mindanao Power Block, a power consumer advocacy group, urged Transco to present "real financial indicators," noting that some of the company's forecasted figures were "hyped."
Dr. Melchora Ambalong of the Lanao Consumers Federation also zeroed in on the transmission's company's "lavish corporate activities" and admonished its officials to be more "prudent in your spending."
(January 16, 2006 issue)
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