NGCP rates lowered by P0.04/kwh

by Myrna Velasco – February 11, 2016

from Manila Bulletin

In the interim maximum allowable revenue (iMAR) approved by the Energy Regulatory Commission (ERC), the rates of transmission firm National Grid Corporation of the Philippines (NGCP) to be passed on to consumers this year had been cut by P0.04 per kilowatt hour (kwh) to P0.87 from the prevailing rate of P0.9180 per kwh.

ERC Chairman Jose Vicente B. Salazar, in his briefing with reporters, has noted that the reduced rate of NGCP will be reflected on March billing.

He qualified that the iMAR applied for by NGCP had been at P45.287 billion, but in the regulatory body’s decision, it just allowed the pass on of P41.653 billion iMAR or lower by P1.029 billion.

“If we are going to base on the February, 2016 charges which is P0.9180 per kwh, it’s now going to be P0.87 this coming March,” Salazar noted.

He expounded that they have temporarily set aside the recovery of some costs being claimed by NGCP as under-billed in its previous reset under performance-based regulation (PBR).

The ERC chief said “base on our assessment of submitted documents and we benchmarked it with respect to the assessment which we adopted in Meralco (Manila Electric Company) application for MAP (maximum average price), we determined that P41.65 billion is the amount that should be allocated and approved for the iMAR of NGCP.”

ERC spokesperson Floresinda B. Digal has explained further that “basically, nothing is touched on their revenue requirement…what we did was to remove the factors or components of their previous rates that were referring to a former regulatory period.”

She stressed that the approved iMAR “is still subject to true-up and adjustment” in the final determination that the ERC will be issuing in due time.

The previous cost recoveries being batted for by NGCP, Digal added, can still be re-applied in the next PBR reset.

In the Commission’s order, it was emphasized that the issuance of provisional authority will allow NGCP “to timely implement the proposed iMAR 2016 and iNPI (interim net performance incentive) for 2015.”

It added “the immediate implementation is necessary to reduce, if not eliminate, the risk of under-recovery which is substantial to applicant NGCP.”

The ERC similarly averred that “the process for the final determination for 4th regulatory period (for PBR) is yet to be completed.”

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