NGCP justifies recent P0.15/kWh power-transmission charge hike

By Lenie Lectura – February 14, 2017

from Business Mirror

The National Grid Corp. (NGCP) on Tuesday shed light to the P0.15-per-kilowatt- hour (kWh) increase in transmission charge collected by the Manila Electric Co.  (Meralco) from its customers in their March electricity bills.

Last week Meralco announced that power rates this month will shoot up by P0.92 per kWh, which brought overall rate to P9 per kWh. The upward adjustment was mainly due to the P0.62-per-kWh increase in generation charge, P0.15-per-kWh increase in transmission charge and another P0.15-per-kWh upward adjustment in taxes and other charges.

On transmission charge, Meralco attributed the P0.15-per-kWh upward adjustment to the increase in Power Delivery Service Charges caused by the implementation of higher interim Maximum Allowable Revenue (iMAR) by the NGCP.

Higher ancillary service charges also contributed to the increase in the transmission charge, Meralco said last week.

NGCP officials, in a news briefing, said “there was technically no increase, but nominally consumers will feel” the impact nonetheless because the adjustment was brought about by “an unrecovered portion of iMAR in 2016.”

NGCP applied for a P45.28 billion iMAR) for 2016. The Energy Regulatory  Commission (ERC), however, approved in early 2016 an amount of only P41.65 billion. The grid operator filed a motion for reconsideration, which the ERC increased to P43.789 in December 2016.

Since the ERC order that adjusted NGCP’s iMAR to P43.789 billion was released in December 2016, it needs to recover about P2 billion. This amount represents the difference in the ERC approved 2016 iMAR from an initial P41.65 billion to P43.789 billion later.

“We have an under recovery of P2 billion, which we were allowed to collect this in 2017,” NGCP Spokesman Cynthia-Perez Alabanza said.

The P0.15-per-kWh increase in transmission charge in the March electric bills of Meralco already reflects the adjustment in NGCP’s iMAR. However, Alabanza clarified that NGCP is not aware how much of the P0.15 per kWh adjustment was attributed by Meralco to the adjustment in iMAR. “There are other factors that affect transmission charges. One of which is ancillary charge,” Alabanza said.

Meanwhile, the NGCP will commence the construction of 20 major transmission projects this year. Seven of the 20 projects are transmission backbone projects that will ensure sufficiency and reliability of power supply.

These are the Calaca-Dasmariñas 500-kV (kilovolt)  project, the Hermosa-San Jose 500-kV project, the Pagbilao Extra-High Voltage project, the Cebu-Negros-Panay 230-kV Backbone project, the Mindanao 230-kV backbone project, the Luzon and the Visayas Voltage Improvement projects, and the Tuguegarao-Magapit 230-kV project.

“These are all backbone projects. It will come back to the grid as investments,” said Alabanza. The NGCP, according to Alabanza, has secured the provisional authority (PA) to implement these seven projects. All 20 projects are expected to be finished within three to five years.

The NGCP is required to seek prior approval from the ERC of any plan for expansion or improvement of its facilities in relation to its authority and responsibility to construct, install, finance, improve, expand, rehabilitate and repair the nationwide transmission system and the grid.

Along with its responsibility for the planning, construction and centralized operation and maintenance of its high voltage transmission facilities, it is indispensible for NGCP to ensure a reliable and high-performance operation of the transmission system.