The Energy Regulatory Commission (ERC) granted provisional approval on the National Grid Corporation of the Philippines’ (NGCP) capital expenditure (CAPEX) program for Calendar Year (CY) 2017.  NGCP’s application covered CAPEX for CYs 2017 to 2020 with a proposed total cost of some PhP113.4 Billion, but the ERC only provisionally approved the CAPEX for this year (2017) amounting to PhP5.5 Billion.  The ERC’s approval covers fifty-eight (58) projects, out of the sixty-five (65) projects proposed by NGCP, which are found to be urgent and crucial to ensure continuous, efficient, and reliable supply of electricity. 

In its evaluation, the ERC found that the NGCP’s PhP113.4 Billion proposed total CAPEX cost included costs that are beyond CY 2020.  The ERC’s provisional approval are subject to the following conditions:  (1) The proposed projects shall be subject to optimization based on its actual use and/or implementation during the reset process for the next regulatory period; (2) NGCP to conduct competitive bidding for the purchase of major materials in the implementation of the proposed projects; and (3) NGCP to pay in staggered basis the permit fee in the amount of PhP41,311,170.00 for the 2017 projects. 

NGCP, a corporation created pursuant to Republic Act No. 9136, or the EPIRA Law, is mandated to assume the transmission functions of the National Transmission Corporation (TRANSCO). NGCP proposed Grid Expansion and Reliability projects, Operations and Wholesale Electricity Market Support (WESM) projects and other Non-Network Projects deemed essential to provide continuous supply, efficient, reliable and best possible quality of service to its customers.

“The Commission needs to study further the propriety of the CAPEX projects and their corresponding costs for the years 2018 up to 2020.  There is no urgency to grant approval of those projects which can be done upon completion of the public hearings.    We need to establish and ensure that the projects are indeed necessary so as not to unduly burden the consumers with exorbitant power rates”, ERC Chairman and CEO Jose Vicente Salazar said.