ERC goes public on connection charging policy for Transco
The Energy Regulatory Commission (ERC) will hold a series of public consultations on the definition of connection assets for the connection charging policy of the state wire firm, National Transmission Corporation (TransCo). The policy on connection charges will lead TransCo in determining charges reflective of true costs in connecting its customers to the grid.
“A well-defined terms and conditions for charging connection assets will ensure transparency in the costs of transmitting power from sources to distribution/load side,” ERC Chairman Rodolfo B. Albano, Jr. ascertained.
Connection assets are those assets that are put in place for the primary purpose of connecting a customer to the grid. These assets, however, have to be defined in order to avoid uncertainties as to which transmission connection assets are being utilized to connect customers to the grid. The definition will also segregate TransCo’s connection assets that were included in its approved rate base to prevent double charges.
Under the present set-up, TransCo customers are charged with power delivery service (PDS) at fixed cost. This means that generation companies and distribution utilities share the costs incurred by TransCo in connecting them to the grid or for using its transmission assets, irrespective of whether or not they benefit from such connection asset being installed for the sole use of a customer.
The implementation of this policy will result to a reduction in the cost of PDS since the connection charges on the connection assets are separate and chargeable only to a customer benefiting from such assets. The PDS cost will be determined upon approval of TransCo’s application for Maximum Allowable Revenue (MAR). The said approval is for the 2nd regulatory period covering the years 2006 to 2010 following the Transmission Wheeling Rates Guidelines (TWRG).
The draft terms and conditions of this policy were already subjected to series of public consultations last year. Comments and suggestions of the stakeholders were already considered in the draft determination except for the issue on the definition of connection assets.
Deadline for submission of comments (both hard and soft copies or e-mail to regulatory@erc.gov.ph) is on March 9, 2006. The proposed draft on the definition of connection assets maybe photocopied, at cost, during regular office hours at the ERC Main Office or maybe downloaded from the ERC website at www.erc.gov.ph. Only parties who have filed their comments within the prescribed period will be considered parties of record.