HIGHER TRANSMISSION charges for July will be reflected in power bills for August, after the National Grid Corp. of the Philippines (NGCP) moved to collect its maximum allowable revenue (MAR).
In a briefing on Wednesday, Julius Ryan D. Datingaling, NGCP head of business and regulatory development, said overall transmission rates increased by 9.25% month on month to P1.3233 per kilowatt-hour (kWh).
“The increase of the transmission rates is due to the new revenue of P58 billion and the under-recoveries of P28 billion, plus the decrease in energy consumption,” he said.
Transmission wheeling rates, or what NGCP charges for its primary service of delivering electricity, rose 28.5% to P0.5923 per kWh.
Ancillary service (AS) charges declined 5% to P0.5872 per kWh.
Other charges include the universal charge, Feed-in-Tariff Allowance, and the value-added tax on transmission and AS charges.
The Energy Regulatory Commission (ERC) authorized the NGCP to recover its MAR this year of P58.1 billion, translating to an anticipated increase of P0.0629 per kWh. MAR is the maximum amount the NGCP is allowed to take in annually to recover its operational expenses.
The decision also allows the NGCP to collect P0.0384 per kWh over 84 months, or until the P28 billion in under-recoveries is fully collected.
The ERC approval forms part of NGCP’s fourth regulatory period reset, spanning the 2016 to 2022 period.
In a 155-page decision, the ERC approved a MAR of P335.79 billion for the NGCP for the period, against the P552.19 billion the company had been seeking.
The rate reset process is usually a forward-looking exercise that requires the regulated entity to submit forecast expenditures and proposed projects over a five-year regulatory period. The ERC assesses the actual performance of the entity and adjusts rates as needed.
“The approved increase will help finance NGCP’s efforts to further strengthen the power grid,” the company said.
NGCP Spokesperson Cynthia P. Alabanza said the company is considering filing an appeal with the ERC, hoping that some other expenses could be considered which it deemed necessary for the proper operation of the transmission system.
“If that’s what we go by, our request of P500 (billion) is reasonable. But again, we will follow the process,” she said.
“The ERC released a decision, and NGCP has the opportunity to explain its request, and will wait for the resolution. We will comply once the decision is final,” she added. — Sheldeen Joy Talavera