The Energy Regulatory Commission (ERC) has allowed the National Grid Corporation of the Philippines (NGCP) to implement an interim maximum annual revenue (IMAR) of as much as P51.47 billion for 2020.
The decision dated March 23, 2022 but was only recently promulgated, said the approval will cause a slight increase in transmission charge of P0.0398 per kilowatt hour.
The ERC deemed the increase as necessary for NGCP to be able address its capital expenditure requirements in terms of load growth as well as generation capacity additions and compliance to rules and regulations for the company to perform better in terms of system reliability, security and integrity of the grid.
“Such approval is determined to provide a fair and reasonable interim transmission rates that will serve the public interest and signal the efficient utilization of transmission facilities that will ultimately redound to the best interest and benefit of the public,” the decision read.
The ERC added the increase in IMAR of NGCP is needed to address expenditure requirements given the 15 percent increase in demand in 2020 at 170.32 gigawatts (GW) from 2016’s 147.97 GW.
The ERC ordered NGCP to submit its proposed recovery scheme for the its unbilled IMAR 2020 for the years 2020, 2021 and the first four months of 2022.
In July 2020, NGCP voluntarily deferred the implementation of its approved increase of its IMAR for the year in consideration of the effects of the pandemic.
NGCP’s IMAR, which is used to fund transmission projects and other grid investments based on the Department of Energy’s power development plan, is subject to ERC’s approval for every regulatory period.
