THE National Grid Corp. of the Philippines (NGCP) has won approval from the Energy Regulatory Commission (ERC) to pursue its P1.63-billion substation project in Ilocos Norte.
In a notice, the ERC said that the approval of the projects is subject to “optimization based on actual use and verified expenses, and the additional instructions issued by the Commission during the deliberation.”
According to the NGCP’s 2022 application, the proposed Pinili 230-kilovolt Substation Project seeks to address load growth in the Ilocos Region.
The grid operator said the project will serve as the new connection point for future renewable energy power plants in the area.
The project is expected to be finished within 62 months.
Pinili Substation is among six projects worth a total of P20.33-billion that NGCP is seeking to pursue under the application.
Under Section 9 of the Electric Power Industry Reform Act (EPIRA) of 2001, the grid operator is required to seek the approval of the ERC for any plan to expand or improve its facilities.
Last month, the ERC said it completed the NGCP’s fourth regulatory period rate reset spanning 2016 to 2022.
In a decision by the majority composed of commissioners Alexis M. Lumbatan, Floresinda G. Baldo-Digal, and Marko Romeo L. Fuentes, the regulator approved a maximum allowable revenue of P335.78 billion for NGCP for the period.
Following the decision, the majority authorized the NGCP to collect P28.29 billion in under-recoveries, which will result in an increase in transmission charges.
Under the seven-year recovery period set by the majority, the NGCP is allowed to collect an additional P0.1013 per kilowatt-hour in transmission charges over the 84 months from issuance of the decision.
EPIRA authorizes the ERC to establish a method for setting transmission and distribution wheeling rates. The rates must be set in a way that allows the recovery of “just and reasonable costs and a reasonable return on rate base” to enable the entity to operate viably. — Sheldeen Joy Talavera