ERC warns Napocor on supply contracts

The Energy Regulatory Commission (ERC) has given the National Power Corp. (Napocor) until next month to resolve its row with the Manila Electric Co. (Meralco) on the so-called transition supply contract (TSC) or face severe penalties.

"We have given them (Napocor) so many days to submit. There are sanctions if they will not submit by September," ERC chairperson Fe Barin said, in an interview.

Section 67 of Republic Act 9136 or the Electric Power Industry Reform Act of 2001 provides that Napocor shall file with the ERC for its approval, the TSCs duly negotiated with the distribution utilities within six months from the effectivity of the law. The EPIRA was passed on June 26, 2001.

ERC could impose administrative sanctions and fines of P100,000 plus P100 a day for every day of violation for failure to file duly negotiated TSC within the time prescribed by law.

The TSCs shall contain the terms and conditions of supply and a corresponding schedule of rates, consistent with the provision of the Act, including adjustments and/or indexation formulas which shall apply during the term of such contracts.

Under the law, the terms of the TSCs shall not extend beyond one year from the introduction of Open Access which is expected to happen by end-2003.

Such TSCs shall be based on the projected demand of the distribution utilities less any of their currently committed quantities under eligible contracts.