Amended accord of Veco, Toledo firm okayed

The Energy Regulatory Commission finally approved the proposed amendments in the purchased power agreement and the supplemental agreement between the Visayan Electric Company and Toledo Power Corporation.

On January 5, 2004, VECO and Toledo Power petitioned the ERC for approval and review of their amended and restated electric power purchase agreement, or AREPPA.

Under such agreement, Toledo Power will supply 70 megawatts to VECO at the delivery point with minimum energy off-take of 26,776,000-kilowatt-hour based on a 40-MW block power during peak hours and a 25-MW block power during off-peak hours until June 25, 2004.

Later in November that year, the ERC granted the firms' petition a one-year provisional approval after it consolidated the two agreements, and after the petitioners met with the requirements. Last November 23, the ERC extended for another three months the provisional authority.

The recently approved agreement will last for 12 years and electricity tariff would be equal to the National Power Corporation's unbundled rates and charges for the Visayas grid. These ERC-approved rates will be adjusted automatically as the ERC adjusts generation rates and charges.

On the other hand, one of the salient points of the supplemental agreement is the automatic adjustment of electricity tariff when the Time of Use rates of the NPC are adjusted by the ERC.

The Time of Use rates reflect the cost of producing electricity based on the time of usage, which means that as demand increases during peak hours, the cost of producing electricity also rises. - Wenna A. Berondo