VECO filed for a new formula claiming it needed to recover its foreign exchange losses and collect its deferred currency exchange account, or DCEA.
But the ERC said it has to confirm first VECO's claims of losses because these were already calculated based on the old formula that the firm had implemented and collected.
On August 30, 2004, the ERC ordered VECO to fix the formula at P0.0034 per kilowatt-hour and to submit a new formula that will be consistent with the new unbundled rate structure.
Last April 26, VECO applied for a new CERA and DECEA, to cover the August 2002 to February 2005 period, in the amount of P0.0367 per kilowatt-hour.
The ERC turned this down and ordered VECO to file separate applications instead for new supplemental calculation to recover its foreign exchange losses (November 2004 to February 2005) but with the use of the previously approved CERA formula.
The ERC further instructed the firm to file for a new calculation of its proposed formula for the period starting March 2005.
However, VECO argued that the old formula was no longer applicable due to fluctuations in the exchange rate, the reason why it applied for a new CERA to cover its loan amortization.
VECO also contended that the new formula is consistent with the new unbundled rate structure but the firm wanted it subjected to recalculation every six months thereafter.
The ERC then ruled that while the guidelines for exchange rate adjustments took effect on February 2003, still the rates within the August 2002-October 2004 period should be computed based on the old formula.
"Foreign exchange losses should be calculated by VECO based on its old CERA formula, since the proposed new CERA formula has not yet been approved by the commission," ERC said in denying VECO's application. v