NGCP transmission rate reset process starts

THE Energy Regulatory Commission (ERC) said on Sunday that it has initiated the process of resetting the transmission system rate for the National Grid Corp. of the Philippines (NGCP).

“The long delay in the reset has not been fair in many respects. Consumers and grid users, on one hand, have become increasingly skeptical of the reasonableness of the rates that continue to be charged,” Monalisa C. Dimalanta, ERC chairperson and chief executive officer, said in a statement.

The ERC said it promulgated Resolution No. 08, series of 2022 or the Amended Rules for Setting Transmission Wheeling Rates (RTWR), governing the rate reset process for the NGCP.

Transmission wheeling rates are the direct charge for the use of transmission facilities for the delivery of electricity.

As of July, the NGCP said that average transmission rate for Luzon was P0.9911 per kilowatt-hour.

The ERC said that the RTWR determines how much the national transmission utility should be allowed to charge users of the high-voltage system.

According to the ERC, the last transmission rate reset was for the regulatory period of 2010 to 2015. The amended RTWR will set the rules for the rate reset process covering 2023-2027.

Ms. Dimalanta said that the review process will consider the actual expenditures and actual performance of the NGCP.

“The Commission will also consider in its determination the expert studies procured by ERC on the components of the reset, including for the Weighted Average Cost of Capital (WACC) and the valuation of the Regulatory Asset Base (RAB),” the ERC said.

The ERC said that the amended RTWR will eliminate over recoveries, double compensation, and redundant inflationary considerations.

The ERC said the rules also include enhanced criteria for the Performance Incentive Scheme and clarify reporting requirements and penalties for non-compliance. — Ashley Erika O. Jose