MANILA, Philippines - Therma Marine, a subsidiary of AboitizPower, said it will refund the National Power Grid Corporation of the Philippines (NGCP), in compliance with the Energy Regulatory Commission (ERC) ruling.
In its ruling dated August 12, the ERC reduced TMI's capital recovery cost for its power barge 117 and 118, as indicated in its Ancillary Service Purchase Agreement with the NGCP.
"The welfare of the Mindanao public is our topmost priority so we are coordinating closely with NGCP to work out the fastest possible way to effect the refund," TMI COO Jovy Batiquin said.
The ERC order slashed TMI's capital recovery cost for PB 117 from P0.7768 to P0.5564 per kilowatt-hour (kWh) in 2010 and P0.5302/kWh for 2011.
For PB 118, the approved recovery cost is down from P0.7768 to P0.5150/kWh in 2010 and P0.4912/kWh in 2011. The adjustment will only have an impact on the capital recovery fee portion of the ancillary power supplied by TMI to NGCP.
"Ninety percent of TMI's cost of power is for fuel, which is a pass-through charge. The remaining 10-percent is for the salaries of our employees, spare parts, insurance, maintenance costs and capital recovery," Batiquin said.
TMI will no longer contest the ERC decision and start the refund process as early as possible.
"We have decided to not file any motion for reconsideration. We won't contest ERC's decision," Batiquin said.
TMI will submit the actual refund amount to the ERC for approval, and will start refunds to NGCP.
The NGCP will then apply the refund to the bills of electric cooperatives and distribution utilities, which will pass the benefits to consumers. The process is expected to take 4 to 6 months.
"The refund will mean savings for the ultimate consumers in terms of lower energy costs," Batiquin said.
TMI's oil-fired 200-MW power barges were contracted by NGCP in 2010 to serve the Mindanao grid during the debilitating brown outs that year, caused by the drought.
AboitizPower is currently developing projects that will add 354 MW of power in Mindanao within the next 3 years to address the power shortage in the region.