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Thursday, March 30, 2006
Energy body approves amendment in Peco-PPC agreement
By Kathy Villalon Cinco
THE Energy Regulatory Commission (ERC), in its decision dated March 10, approved the amendments in the Power Purchase Agreement (PPA) between Panay Power Corporation (PPC) and Panay Electric Company (Peco).
This was revealed by Peco's legal counsel lawyer Hans Sayno and by a copy secured by Sun.Star from the ERC's website (www.erc.gov.ph).
The ERC stated that the approval of the amendment agreement is necessary to ensure sufficient, reliable and secure power supply to the people of Iloilo City.
Modifications
Sayno said the amendment in the agreement of the PPA between PPC and Peco was approved but with some modifications.
"If you look at your bill, you will see that the affected part here is the generation charge. The generation charge has three components --- capacity fee, energy fee and fuel payment. These are what the PPC charges Peco which in turn is being passed on to consumers," Sayno explained.
He added that the ERC's decision regulates PPC's charges. "Whatever the PPC charges Peco, that will be what the latter will charge to its consumers."
Monthly change
Sayno reiterated that what the ERC approved was not the P5.50 charge, but the formula in computing the charges. "So, we couldn't give a fixed number on how much to charge. Every month there will be changes --- increase or decrease --- depending on factors like the consumer price index (CPI) formulated by the National Economic Development Authority (Neda), foreign currency and oil price," he said.
Conditions
The ERC's approval of the amendment agreement of the PPA between Peco and PPC are subject to conditions.
First, the amount recoverable by PPC from Peco is initially referenced on the Dec. 31, 2004 base rate of P2.1012/kWh and shall be adjusted monthly corresponding to the percentage change in the CPI and the actual Peso per Dollar exchange rate, as published by the Bangko Sentral ng Pilipinas (BSP), of the last day of the month immediately preceding the applicable billing period.
Second, the cost of power purchased by PPC from Avon River Holdings Inc. (to augment PPC's supply to Peco during peak periods and during maintenance of units of PPC's power plant/s) and delivered to Peco shall be billed at rates equivalent to the "for kWh up to MGEQ" under the decision; PPC shall bill Peco every month for the cost of purchased power and Peco shall recover the same under Agra.
Third, the three percent Payment Discount (PPD) previously granted by PPC to Peco shall be removed in view of the lower base rates approved under the contract.
Fourth, the Primary Voltage Discount (PVD) and the Power Factor Discount (PFD) previously granted by the PPC to Peco shall also be removed for the same reason cited above.
Fifth, Peco and PPC shall connect to the Cebu-Negros-Panay (CNP) Grid of NPC-Transco and may contract for electricity supply in excess of its contractual commitments to PPC, as and when supply is available, and PPC shall enter into a contract with NPC for the appropriate Ancillary Services; the actual cost of Ancillary Service shall be passed on to Peco's customers.
Sixth, the cost of start-up diesel fuel and bunker fuel is a pass-on cost of PPC to Peco provided the consumption rate of bunker fuel does not exceed 0.2600 liters per kWh or actual fuel consumption, whichever is lower; the consumption rate is based on the current 65 percent load factor of Peco.
Last, Peco and PPC shall submit a report to the ERC, not later than 90 days from receipt of the decision, on their compliance to the decision and conditions.
The decision was signed by ERC Chairman Rodolfo Albano, Jr. and Commissioners Jesus Alcordo and Alejandro Barin.
Not yet final
However, Sayno, in a radio interview Wednesday, said the decision is not yet final and executory.
"It will only be final and executory if nobody files a complaint against it. After 15 days upon receipt of the decision, any party can still file a motion for reconsideration. After that, the ERC will resolve this. After denying or granting the motion, we have to count 15 days again before it would be final. Those against these can still appeal to the Court of Appeals, but normally, the court does not question the decision of ERC unless there's a Temporary Restraining Order (TRO).
(March 30, 2006 issue)
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