Republic of the Philippines

ENERGY REGULATORY COMMISSION

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NGCP Files for Transmission Rate Reset

23 December 2022 /ERC-Planning and Public Information Service


PASIG CITY – The National Grid Corporation of the Philippines (NGCP) officially filed with the Energy Regulatory Commission (ERC) on 22 December 2022 its Application for the resetting of the transmission rates charged to all electricity end-users in the country.

NGCP’s Application comes after the ERC denied its Omnibus Motion to hold the rate reset in abeyance until the ERC holds another round of public consultation on the rules and after ERC has clarified certain provisions in the Amended Rules for Setting Transmission Wheeling Rates (Amended RTWR). ERC denied NGCP’s Omnibus Motion in its Order dated 25 November 2022 stating that several public consultations on the amendments to the RTWR were held since 2014, all with NGCP’s participation. ERC also addressed NGCP’s requests for clarification in the said Order.

It may be recalled that, on 28 September 2022, ERC promulgated Resolution No. 08, Series of 2022, or the Amended RTWR. The Amended RTWR covers the Rate Reset for the Fourth (covering the years 2016 to 2022) and Fifth Regulatory Periods (covering the years 2023 to 2027). The last transmission reset completed by the ERC was in 2010, for the Regulatory Period covering the years 2011-2015.

The application filed by NGCP covers the Fourth (4th) Regulatory Period. Simultaneous to the filing of the application, NGCP also filed a Petition for Rule Making to change the coverage of the 4th Regulatory Period in the Amended RTWR to 2016 to 2020.

ERC will commence next month the hearings on the Application and the process of verification of the completeness and accuracy of the information submitted by NGCP. The rate reset is expected to result in lower transmission charges for the benefit of electricity consumers.  ERC Chairperson Monalisa C. Dimalanta says that NGCP’s application is a positive development towards resolving the long regulatory lag in the energy sector.

“We are encouraged by NGCP’s cooperation in filing its application for a rate reset. We view this as an alignment of interests among the regulator and energy stakeholders to pursue moving our energy sector towards a regime of higher level of compliance and accountability.”

In related news, NGCP has also complied with ERC’s order to pay penalties amounting to Five Million One Hundred Thousand Pesos (PhP5,100,000.00) for non-compliance with the circular issued by the Department of Energy (DOE) requiring the procurement of reserves. The penalty was paid on 21 November 2022.

In a Decision dated 24 October 2022, ERC ruled that NGCP violated Sections 7.4 and 7.5 of DOE Department Circular No. DC2021-10-0031, entitled “Prescribing the Policy for the Transparent and Efficient Procurement of Ancillary Services by the System Operator” (AS-CSP Policy).

The AS-CSP Policy requires all ancillary services or reserves required by the Grid to be procured pursuant to an open and competitive process under a firm contracting agreement. This aims to improve transparency, competitiveness, and wide dissemination of bid opportunities among qualified facilities. For energy security, it is crucial for NGCP to meet and maintain the required reserve levels.

 


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