Fuel cost and peso improvements to reduce electricity rates - ERC
The ERC (Energy Regulatory Commission) provisionally ordered the NPC (National
Power Corporation) on 5 September 2007 to reduce its generation rates to reflect
improvements in fuel cost and foreign exchange rates for the period covering
February 2006 to June 2006. The directives were issued in ERC Case No. 2007-099
RC and 2007-100 RC that pertained to NPC’s recovery of: (1) incremental
fuel and independent power producer (IPP) costs; and (2) foreign currency exchange
rate fluctuation costs under the Incremental Currency Exchange Rate Adjustment
(ICERA). The ERC, in the said rulings, adjusted the rates to reflect the impact
of the Deferred Accounting Adjustment (DAA) on fuel costs and ICERA, including
the corresponding VAT (Value Added Tax) on the October 2007 billing period.
Said reduction, being provisional, could go higher depending on the recovery
period that the ERC will adopt in the final decision.
“The reduction reflects the improvements in fuel costs and the Peso against other foreign currencies for the said five-month period. More changes in rates are seen as NPC still has to file applications for the remaining periods (i.e., July 2006 to June 2007). As it stands and on the average, there will be reductions in NPC rates by 25 centavos/kWh for Luzon; 7 centavos/kWh for Visayas; and 6 centavos/kWh for Mindanao,” ERC Chairman and CEO Rodolfo B. Albano, Jr. said. The variance in the generation mix among the Luzon, Visayas, and Mindanao grids caused the discrepancy in the generation rates reduction. The NPC’s reduced generation rates will be in effect until such time that the next application of similar nature has been filed by NPC and approved by the ERC.
“NPC customers, particularly the
DUs, will be charged with reduced generation rate which, in turn, will be passed
on to the end-consumers by the November 2007 billing period,” Chairman
Albano added. “The promotion and protection of long-term consumer interest
are always the foremost concerns of the ERC,” Chairman Albano concluded.
October 18, 2007