NGCP gets ERC nod to hike revenue ceiling to P43.079 billion

by Lenie Lectura, February 10, 2015
from BusinessMirror

The National Grid Corp. of the Philippines (NGCP) has received the nod of the Energy Regulatory Commission (ERC) to raise its maximum allowable revenues (MAR) to P43.079 billion, from P42.507 billion last year.

NGCP’s approved maximum revenue translates to an indicative transmission charge of P0.6161 per kilowatt-hour (kWh), down from P0.6416 per kWh last year.

“Compared to the MAR 2014, the effective MAR for 2015 increased by P575.27 million. However, the actual rate impact to the customers is projected to be a decrease, since the percentage increase in billing determinant is higher than the percentage increase in the MAR. This is because the higher [is] the billing determinant, the lower [will be] the resulting rate per unit,” the ERC in its 12-page decision.

NGCP’s MAR for 2015 will be implemented in its January 2015 billing, the ERC added. The ERC’s order was docketed on January 23, 2015, but was released only on Monday.

In the same order, the ERC did not include the performance incentive scheme (PIS) of NGCP, “considering that NGCP has yet to substantiate the same.”

NGCP is claiming a PIS of P923.08 million. The PIS provides for rewards or penalties based on certain performance standards.

NGCP’s application for MAR and PIS forms part of an annual verification and adjustment of tariffs allowed under the Electric Power Industry Reform Act of 2001.

NGCP is responsible for dispatching electricity from the power plants via its transmission facilities all the way to the distribution utilities (DUs) and electric cooperatives (ECs), which, in turn, distribute power to end-consumers.

NGCP earns by charging transmission fees from the DUs and ECs, which are collected from end-users of electricity.

NGCP’s transmission charges are for power-delivery service, system operations and metering services. These charges recover the cost of conveying electricity to or from the grid, the cost of system operation services and the cost metering facilities, respectively.

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