ERC approves TRANSCO’s Transmission Incentive Program (TIP)

The Energy Regulatory Commission (ERC) issued an Order on July 25, 2003 authorizing the implementation of the Transmission Incentive Program (TIP).

ERC Chairman Manuel R. Sanchez said that the program “will provide immediate relief in terms of discounted/lower cost of transmission charges that will ultimately benefit the consuming public.”

The program provides special rate discount to all large electricity consumers who are presently availing of NPC’s Special Program to Enhance Electricity Demand (SPEED) program. The fixed discount rate to be applied to the actual monthly energy consumption is PhP0.10/kWh, effective for the duration of the program.

The program shall be implemented into two phases. During the first phase of the program implementation, discounts shall be given to industrial and commercial customers with a demand of at least 1000 kw per month. These customers include (1) Directly connected customers with an existing power supply contract with NPC, (2) Customers of Distribution Utilities (DUs) with an existing power supply contract with NPC, (3) Customers located in one contiguous area such as those operating within Export Processing Zones (EPZs), Special Economic Zones (SEZs), industrial parks and estates served by DUs, and entities with an existing power supply with NPC.

Phase II will provide fixed discounts to the abovementioned customers with a demand of at least 500 kw per month.

The TIP program takes effect immediately, until September 2004, or until the implementation of the Wholesale Electricity Spot Market (WESM), or when there is no available NPC unutilized generating capacity in a particular grid, whichever comes first.

Copy of Order

July 25, 2003