TransCo eyes recovery of costs incurred from typhoon damages

The National Transmission Corporation is now eyeing the approval of the Energy Regulatory Commission for its recovery of costs incurred from the damages of its transmission lines due to the typhoons that ravaged some parts of the country recently.

The state-owned firm already notified the ERC that it would be filing within 12 months its petition for the approval of a pass-through amount that would allow it to recover its expenses to cover the damages. Should the ERC approve this, TransCo could then increase its rates to customers as a way of recovering the cost of repairs and restoration works on its transmission structures that tropical storm Reming had damaged. The amount to be recovered was not however specified but TransCo explained that under Article 10 of the Transmission Wheeling Rate Guidelines, the firm could seek ERC's approval of the so-called Force Majeure Pass-Through Amount. This is on top of the ERC-approved Maximum Allowable Revenue.

The rate guidelines define a force majeure event as a typhoon, storm or tropical depression, flood, drought, volcanic eruption, earthquake, tidal wave or landslide that results or likely-to-result in an increase in costs of a regular entity, such as TransCo, in its service of electricity transmission. It would be up to the ERC to decide on the merits of the application, the eligible pass-through charge, and the period over which the pass-through charge will be applied.

The ERC responded to TransCo's notice by saying that, in case of a force majeure event, it will entertain application of the firm for recovery from power consumers of cost in repairing and restoring power service. ERC Chairman Rodolfo Albano, Jr said, "Typhoons, earthquakes and other natural calamities are 'acts of God' that cannot be controlled...It is not possible for TransCo to predict such events and incorporate the costs... the ERC may allow such amounts to be recovered on top of the approved MAR."

To get the process of cost recovery going, TransCo shall submit now to the ERC its Force Majeure Event Notice within three months after the event occurred, including its specific details. ERC said TransCo must also provide within 12 months a Force Majeure Event Claim detailing the costs, and the extent in which TRANSCO has claims of any insurance against the consequences of such event. TransCo should also indicate the proposed Pass-Through Amount, the basis for the application, and the amount it want to pass on to its customers, said the ERC. - Wenna A. Berondo/RAE