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NGCP, TMI told to refund power consumers

CAGAYAN DE ORO CITY (MindaNews/08 October) – The Energy Regulatory Commission came out with a ruling on Tuesday denying the Ancillary Service Purchase Agreement (Aspa) petition of the Therma Marine Inc. and the National Grid Corporation of the Philippines.

Abante Mindanao Party-List Rep. Maximo Rodriguez said the ruling entitles power consumers to a refund of about 50 centavos per kilowatt hour.

Sought for comment, the TMI said that it will come up with a statement soon.

It may be recalled that at the height of the power outages in Mindanao which were blamed on the El Nino phenomenon, power rates increased by about 100 percent due to ancillary charges levied by TMI on NGCP which the latter passed on to the electric utilities and consumers.

The Aspa was for the TMI to provide 100 megawatts from their newly acquired power barges 117 and 118 in Nasipit, Agusan del Norte and Maco, Compostela Valley.

The ERC ruled that the nature of the operation of the TMI power barges does not fully conform to the definition of ancillary services.

Ancillary services can only be used by the NGCP, the current private concessionaire of the country’s power transmission lines when “necessary to maintain the reliability and quality of power services, stabilizing electricity supply and prevents system-wide blackout.”

The Aspa application of TMI and NGCP was opposed by power consumers and electric utilities like the Cagayan de Oro Power and Light Corporation (Cepalco).

They argued that the Aspa takes the nature of a baseload power supply which the NGCP under the Energy and Power Industry Reform Act (Epira) disallows, as generation belongs to the National Power Corporation (NPC) and the private baseload power plants.

Under the Epira, the power industry has been unbundled into three sub-sectors namely generation, transmission and distribution.

Generation is currently being taken by the NPC and private power producers. Transmission, while theoretically still a government function has been transferred to the private sector through the NGCP of the Sy group of companies, while distribution has been given to private distribution corporations and electric cooperatives.

The power barges were former baseload power plants of NPC until the NGCP bought it for a total of U$30-million in 2008. The TMI, however, offered to operate it as an ancillary service provider to the NGCP instead of operating it as a baseload power plant.

The ERC ruling also rejected the capital recovery calculation of TMI on the power barges which they revalued at U$87.4 million. TMI had submitted an 18-percent weighted average capital cost which was not based on the procurement cost but on the revalued cost after refurbishing the aging power barges.

The NGCP in a sudden turn of position said that the short-term option of Mindanao not to have power shortage is to dispatch the TMI power barges “as regular energy supply.”

“Under existing laws and regulations, TMI must directly enter into supply contracts with distribution utilities in Mindanao. Only after such contracts are finalized will NGCP be able to dispatch electricity from TMI power barges,” the NGCP said in a statement.

An official of the Aboitiz Power, mother company of TMI said that they may appeal the ERC ruling. The official, however, did not elaborate for lack of authority to comment on the matter.

Ria Calleja, brand manager of Aboitiz Power said a “public statement on the issue will be issued as soon as possible.”

The ERC ruling gave the NGCP 15 days to come up with guidelines on the refund to the consumers.

Ralph Paguio, vice president of Cepalco said that once the guidelines are out, “we will facilitate the refund to power consumers.” (BenCyrus G. Ellorin/MindaNews)

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