ERC orders NPC to explain non-filing of GRAM and ICERA applications
The Energy Regulatory Commission (ERC) directed the National Power Corporation (NPC) in a Show Cause Order dated 07 May 2008 to explain its failure to file its applications under the Generation Rate Adjustment Mechanism (GRAM) and the Incremental Currency Exchange Rate Adjustment (ICERA) for the period covering July 2006 to March 2008. The ERC has estimated a deferred accounting adjustment (DAA) of Ten Billion Pesos (PhP10,000,000,000.00) which translates to 20 centavos per kilowatt-hour (kWh) over-recovery for the said period.
“NPC’s non-filing of their GRAM and ICERA applications is a violation of Sections 5 of both Implementing Rules for the GRAM and for the ICERA. The ERC hopes that the NPC will take expedient action on this matter to safeguard public interest,” ERC Officer-in-Charge Alejandro Z. Barin said.
Section 5 of the Implementing Rules for the GRAM requires a utility to file a deferred generation cost accounting application setting forth its calculations of the generation rate. On the other hand, Section 5 of the Implementing Rules for the ICERA directs a utility to file a currency exchange accounting application setting for its calculation of the ICERA.
In the said Show Cause Order, the ERC directed the NPC to explain under oath within 15 days from receipt thereof, why no administrative penalty should be imposed upon it, and/or criminal action instituted against its directors and officers for the said violations.
GRAM is a mechanism which allows the periodic adjustment to the generation rate to reflect changes in fuel and purchased power costs after a review by the ERC before costs are passed-on to electricity consumers. ICERA, on the other hand refers to the mechanism which allows the periodic adjustment to the foreign exchange to reflect the changes in currency exchange after review by the ERC before said changes are passed on to electricity consumers.
“Rest
assured that your ERC will remain vigilant in protecting the welfare and interests
of electricity consumers,” OIC Barin concluded.
May 9 , 2008