Lower adjustment in NPC’s GRAM and ICERA provisionally approved - ERC
The Energy Regulatory Commission (ERC) provisionally approved a total reduction of PhP0.3622 per kiloWatthour on NPC’s TOU rates, specifically on the Deferred Accounting Adjustment under the GRAM and ICERA (Generation Rate Adjustment Mechanism and Incremental Cost on Foreign Exchange Rate Adjustment) for the Luzon grid. The said reduction will be effective for a period of 23 months starting on NPC’s December 26, 2008 to January 25, 2009 billing period until (a) the end of the corresponding recovery period or (b) until such time that the full amount shall have been refunded or (c) until the next application for GRAM and ICERA is computed and approved by the ERC, whichever comes first.
The NPC and PSALM’s (National Power Corporation and Power Sector Assets and Liabilities Management Corporation) actual application, which covers July 2008 to September 2008, amounts to an upward adjustment of PhP0.7284/kWh. The ERC evaluation covers not only the period of July 2008 to September 2008, but also the prior periods where DAA had not been fully refunded yet.
The refund under the 12th GRAM amounts to PhP0.3132/kWh and the 11th ICERA refund results to PhP0.0490/kWh or a total of PhP0.3622/kWh reduction. This will result to a net upward adjustment of PhP0.1978/kWh when compared to the current reduction in NPC’s TOU rates at PHP0.5600/kWh.
Variable cost adjustments such as GRAM and ICERA allow the NPC to recover from or refund to its customers any increase or decrease in its fuel and purchased power cost and foreign currency exchange-rate related costs from previous months.
The entire amount of NPC’s pass-through costs like GRAM and ICERA will be felt by electricity consumers being served with power by distribution utilities only if they source one hundred percent (100%) of their power from NPC. Utilities like Meralco (Manila Electric Company) procure their power, aside from the NPC, from WESM (Wholesale Electricity Spot Market at approximately 10%) and from the IPP (Independent Power Producers at approximately 45%). Thus, impact to consumers of the herein ERC approved NPC adjustment will depend on the volume of power sourced from NPC.
January 22 , 2009