Power factor adjustment perks stay

MANILA, July 4 (PNA)—The Energy Regulatory Commission (ERC) has order the National Grid Corp. of the Philippines (NGCP) to continue enforcing the Power Factor Adjustment (PFA) mechanism to its transmission customers.

”Pending hearing and final determination issues raised in this case, the Commission hereby enjoins NGCP to observe the status quo prevailing at the time of the filing of the instant petition and to refrain from discontinuing the implementation of PFA mechanism until further order from the Commission,” the ERC said in a six-page order dated June 29.

In a petition lodged on June 18, the Private Electric Power Operators Association Inc. (PEPOA) said the discontinuance of the PFA would violate the “procedural requirements prescribed for rate applications and other applications or petitions for relief affecting the consumers."

The PEPOA said that the company informed the association that it would stop the PFA for the June 26, 2009 to July 25, 2009 billing period.

The group said the PFA mechanism had served as an incentive, whereby transmission customers like them, would enjoy certain discount on the power delivery charges if their power factor was higher than 90 percent.

It also said that the PFA mechanism induced distribution utilities to invest and install power factor correcting devices such as capacitors on the distribution systems to improve the power factor and avail of the discounts.

The improvement in power factor reduced transmission losses and freed up transmission system capacity, it said.

PEPOA said that if NGCP discontinue with the imposition of the PFA, it would have an impact on their customers.

”The plan of NGCP to discontinue the implementation of the PFA mechanism has a rate impact that will affect the consumers,” PEPOA said in its petition.

PEPOA said that when the National Power Corp. used to handle the generation and transmission functions, the PFA was part of its rate schedule.

Aside from PEPOA, other distribution utilities that filed intervention are Manila Electric Company, the Association of Mindanao Rural Electric Cooperatives Inc., Philippine Rural Electric Cooperatives Association Inc., SKK Steel Corp, the Northern Mindanao Rural Electric Cooperative Association and the Philippine Chambers of Commerce and Industry.