Higher electricity transmission rates coming in August

An increase in transmission rates will reflect in consumers’ power bills this August, with the National Grid Corporation of the Philippines (NGCP) now allowed to regain some of its investments used in beefing up the country’s grid system.

The grid operator on Wednesday said the overall average transmission rates for July billing had gone up by 9.25 percent to P1.3233 per kilowatt hour (kWh) from P1.2113 per kWh in June.

The rate adjustment will appear in the August power bill.

Charges from ancillary services—the costs of reserve power tapped to stabilize the grid during peak demand—dipped to P0.5872 per kWh from June’s P0.6182 per kWh. The NGCP does not earn from these charges, as these are remitted to the generation companies.

The upward adjustment came as the Energy Regulatory Commission (ERC) gave the green light for the NGCP to charge an additional fixed rate of P0.0384 per kWh for 84 months, or a total of P28 billion.

This was issued after almost 10 years, NGCP spokesperson Cynthia Alabanza said.

“The increase we’re seeing is due to the ERC’s recognition of the expenses incurred by NGCP from 2016 up to the present, which were not collected during that time because the fourth regulatory reset did not take place. So this is simply a recovery of the costs spent since 2016,” she said in a media briefing.

The regulator likewise allowed the NGCP to recover the maximum allowable revenue increase amounting to P6.62 billion.

The NGCP welcomed these decisions, saying the approved increase would help fund transmission projects crucial in strengthening the grid network.

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But Alabanza is hopeful that the ERC, under new leadership, will speed up the processing of NGCP’s fifth regulatory reset.

Under a rate reset process, a regulated entity like 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.

Last week, ERC Chair and CEO Francis Saturnino Juan said they were targeting to resolve backlogs involving the capital expenditure projects of distribution utilities and electric cooperatives in four years.

Juan replaced Monalisa Dimalanta after she had submitted her irrevocable resignation last month.