This excerpt taken from the CVA 10-K filed Feb 26, 2007.
Transmission Line Capital Cost Disallowance and Partial CCRP Deferral
In 2003, the ERC issued a preliminary order dated March 20, 2003 disallowing a portion of the capital cost associated with the construction of the transmission line. While confirming that the Partnership would be entitled to payment by Meralco of the full CCRP despite the ERC order, Meralco requested and the Partnership agreed to the deferral of a portion of the CCRP on a temporary basis and subject to resolution of all outstanding issues.
In 2004, the ERC issued its final order dated September 20, 2004 disallowing approximately 30% of the capital cost associated with the construction of the transmission line. That order allowed Meralco to recover $60.7 million
QUEZON POWER, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
of transmission line costs out of the total $88.8 million actual costs incurred by the Partnership and disallowed $28.1 million of the total composed mainly of schedule extension costs. The impact of that decision on Meralco was to reduce the annual CCRP that may be recovered by Meralco from its customers from $13.2 million to $9.0 million. The monthly impact amounted to approximately $350,000 per month.
At approximately the same time, the Partnership reduced the temporary CCRP deferral amount. Meralco also paid excess past deferrals to the Partnership.