ERC sets VECO’s petition for hearing

CEBU, Philippines - The Energy Regulatory Commission is set to hear on March 28 the application of Visayan Electric Company to charge as force majeure capital project the over P28 million repair and reinstallation cost of a transformer that was damaged by a lightning in 2012.

The hearing includes expository presentation, pre-trial conference, and evidentiary hearing will be held at the ERC regional office located at the 11th floor of the AppleOne-Equicom Tower at the Cebu Business Park. It will start at 9 a.m.

VECO asked for ERC’s approval to charge as capital project the P28,159,141.00 repair and installation cost of 1x100 MVA transformer which caught fire on May 27, 2012 after it was hit by a lightning.

The damage has caused massive power interruptions in major commercial, industrial, and residential areas as well as critical government offices within VECO’s franchise area.

The areas particularly affected were Cabancalan, Banilad, Waterfront, Ayala, and Camputhaw.

It added that the result of the on-site electrical test conducted by Ohmnitek Power Corporation on the damaged transformer revealed that the damages inflicted were caused by external fire. There were no physical or electrical indications of internal failure.

The petition added that due to the damage sustained from the fire, its franchise area suffered loss of transformation capacity.

The incident has prompted VECO to temporarily lease a transformer from the National Grid Corporation of the Philippines resulting in the significant increase in its operating expenses. According to VECO, it has incurred P1,217,034 rental per month.

The application was earlier opposed by the Freedom From Debt Coalition-Cebu Chapter.

FDC-Cebu said that the repair and reinstallation of the said transformer could not qualify as capital expenditures project but as maintenance and operating expenses wherein the cost should be shouldered by VECO and must not be recovered from or passed on to the consumers. —/FPL (FREEMAN)