How are the (over)/underrecovery in generation rates computed?

(Over)/Under-Recovery
= Allowable Generation Revenues Actual Generation Revenues = (Allowable Generation Rate Actual Implemented Generation Rate ) x kWh sold

(Over) Recovery: Actual Generation Revenues > Allowable Generation Revenues Under Recovery: Actual Generation Revenues < Allowable Generation Revenues

What is the Allowable Generation Rate?

The Allowable Generation Rate (GR) is computed as follows,

using the formula prescribed by the Guidelines for the Automatic Adjustment of Generation Rates by Distribution Utilities (AGRA)

Sample Computation
Generation Rate for February Assuming:

Power Purchased from IPPs for January: IPP1 = P50,000,000.00 for 5,000,000 kWh IPP2 = P100,000,000.00 for 25,000,000 kWh IPP3 = P70,000,000 for 10,000,000 kWh PPD Availed = P3,000,000.00
GR = [(P50M + P100M + P70M) 50%(P3M)] / (5M + 25M + 10M) =(P220M P1.5M)/40M kWh =P5.4625/kWh

What are the actual implemented generation rates?

2004: Actual generation cost (until October 2004)

Generation rate computed using the AGRA formula (Nov.Dec. 04) 2005 - 2011: Generation rate computed using the AGRA formula

Why are there (over)/under-recoveries in generation rates?

2004: Difference between actual generation

cost versus allowable generation cost 2005 onwards

One-month lag in the implementation of

generation costs Rise/fall of monthly kWh sales Generation charges not passed on due to dispute Adjustments not passed on to avoid violation of the AGRA guidelines

To illustrate
GENERATION Total Amount Due Net of VAT 50% PPD Pilferage Recoveries Net Generation Cost kWh Purchased Allowable Generation Rate kWh Sales Allowable Generation Cost Actual Implemented Rates Actual Generation Revenues Generation (Over)/Under Sep '11 303,622,195.80 911,445.72 302,710,750.08 56,041,054 5.40 48,182,758 260,263,463.55 5.15 248,068,929.56 12,194,533.99 Oct '11 296,772,698.45 310,069.26 296,462,629.19 53,346,981 5.56 46,359,697 257,632,530.15 5.40 250,416,539.86 7,215,990.29 Nov '11 316,441,798.95 306,440.64 316,135,358.31 56,622,220 5.58 48,798,980 272,456,343.60 5.55 271,068,574.10 1,387,769.49 Dec '11 304,840,907.06 48,586.36 304,792,320.70 55,228,259 5.52 47,731,034 263,416,824.75 5.58 266,491,909.03 (3,075,084.28)

How are the (over)/underrecovery in transmission rates computed?

(Over)/Under-Recovery
= Allowable Transmission Revenues Actual Transmission Revenues = (Allowable Transmission Rate Actual Implemented Transmission Rate ) x kWh sold + (Allowable Transmission Rate Actual Implemented Transmission Rate ) x kW sold

(Over) Recovery: Actual Transmission Revenues > Allowable Transmission Revenues Under Recovery: Actual Transmission Revenues < Allowable Transmission

What is the Allowable Transmission Rate?

The Allowable Transmission Rate (TR) is computed as

follows: TR = Transmission Cost Net of VAT and 50% Power Factor Discount / Total kWh Purchased

Sample Computation
Transmission Rate for February Assuming:

Transmission Cost of NGCP IPPs for January: Trans. Cost Net of 100% PFD = P40,000,000.00 PFD = P2,500,000.00 VAT = P3,000,000.00 kWh Purchased = 40,000,000 kWh TR = [(P40M) + 50%(P2.5M) P3M] /40M kWh
=P38.25M/40M kWh =P0.9562/kWh

What are the actual implemented transmission rates?

Thereafter: Transmission rate computed using the TRAM

formula

2007-2010 annual computation 2011 monthly computation

Why are there (over)/under-recoveries in transmission rates?

2004-2006: Difference between approved

unbundled transmission cost versus allowable generation cost 2007-2010: Annualized computation of transmission rates 2011: PFD Treatment Others:
One-month lag in the implementation of

transmission costs Rise/fall of monthly kWh and kW sales

How are the (over)/underrecovery in system loss rates computed?

(Over)/Under-Recovery
= Allowable System Loss Revenues Actual System Loss Revenues = (Allowable System Loss Rate Actual Implemented System Loss Rate ) x kWh sold

(Over) Recovery: Actual System Loss Revenues > Allowable System Loss Revenues Under Recovery: Actual System Loss Revenues < Allowable System Loss Revenues

What is the Allowable System Loss Rate?

The Allowable System Loss Rate (SLR) is computed as

follows, using the formula prescribed by the Guidelines for the Automatic Adjustment of System Loss Rates by Distribution Utilities

Sample Computation
System Loss Rate for February Assuming:

GR = P5.4625 TR = P4.9562 SL% = 12% SL cap = 13% SLR = P5.4625 (0.12/1-0.12) + P0.9562 (0.12/10.12) = P0.7449 + P0.1304 = P0.8753

What are the actual implemented system loss rates?

2004:

2005-2011: computed using the SLR formula

Why are there (over)/under-recoveries in transmission rates?

2004: Difference between approved

unbundled system loss rate versus allowable generation cost 2005 onwards
One-month lag in the implementation of

generation costs Rise/fall of monthly kWh sales Effect of generation charges not passed on due to dispute Effect of adjustments not passed on to avoid violation of the AGRA guidelines