Transco seeks extension on bid for new wheeling charge

The National Transmission Corp. (Transco) has asked the Energy Regulatory Commission (ERC) for a one-month extension to submit an application for a new wheeling charge under the performance-based rate (PBR), a new pricing methodology approved by the ERC.

"We have filed for an extension until end-November this year. We still need to assess the assets that will be included in the tariff setting," Transco manager for business development and tariff Ed Orencia said.

Transco president Alan T. Ortiz, in a separate interview, said the company still has to finalize the evaluation of the subtransmission assets (STAs) to be sold.

"We are just waiting for the STAs guidelines to take effect. We actually have the final list of those assets that will be disposed of," Ortiz said.

The ERC has approved the rules that will govern the sale of the STAs two weeks ago. It should be published in a leading newspaper 15 days before it can be enforced.

But Ortiz said it does not necessarily mean that Transco will have to wait for the full disposal of the STAs before it could apply for a new rate.

"We already have an idea of what items would be retained and what assets will be sold," the Transco head said.

Orencia said Transco was supposed to submit a rate application to the ERC by the end of October but have to extend it pending the release of the STA guidelines.

Ortiz also pointed out that should Transco increase its wheeling charge under the PBR, "it will just flow back to the government’s coffers." "It goes back to the government and it will serve as an incentive to the prospective investors of Transco," Ortiz said.

ERC has promulgated last May the PBR, a new rate-making methodology in determining the transmission charges of the power transmission sector.

The new regulatory framework replaces the traditional return-on-rate-base (RORB) methodology in setting charges.

The ERC, under the PBR, will allow a maximum annual revenue cap pegged to changes in the consumer price index (CPI), but adjusted for productivity and efficiency factors. The proposed methodology will also include a provision for over/under recovery adjustments.

The Electric Power Industry Reform Act (EPIRA) of 2001 authorizes the ERC to adopt alternative forms of internationally-accepted rate-setting methodology from the present RORB mechanism to ensure reasonable price of electricity and to promote efficiency in the transmission sector.