NGCP transmission fees set to go up
The National Grid Corporation of the Philippines (NGCP) will start charging higher transmission fees starting August this year after the Energy Regulatory Commission (ERC) gave it the go-ahead to recover investments in key transmission projects.
ERC released on Monday its decision on the grid operator’s fourth regulatory period, which covers 2016 to 2020.
This set the group’s maximum allowable revenue (MAR) at P335.78 billion. The ERC also reiterated that the NGCP has P28.29 billion in unrecovered investments.
“I think the [increase] will take effect starting in the next billing period,” Monalisa Dimalanta, ERC chair and chief executive officer, told reporters.
Consumers would see a hike in transmission costs for the next seven years or 84 months to the tune of P0.1013 per kilowatt-hour (kWh).
According to the ERC, the amount covers the P0.0629 per kWh average increase in the basic transmission charge and an additional P0.0384 per kWh corresponding to the under-recovered portion of the increased MAR.
Under a rate reset process, a regulated entity, such as NGCP, must submit to the ERC its spending and proposed projects over a period, usually five years, unless extended by the regulator.
This will then be the basis of the rate that will be passed on to consumers.
NGCP had asked the ERC to recover the investment it used to finance two crucial facilities: the Mariveles-Hermosa-San Jose and the Cebu-Negros-Panay transmission lines.
The capital for these projects totaled P87.9 billion, but the NGCP was only allowed to collect an initial P201.78 million.
