THE National Grid Corp. of the Philippines (NGCP) said it is still studying the decision of the Energy Regulatory Commission (ERC) on its fourth regulatory period rate reset spanning 2016 to 2022.
“There were several items that were disallowed and we’re still studying it further to see the impact on the NGCP side,” NGCP Spokesperson Cynthia P. Alabanza said in a briefing on Monday.
Ms. Alabanza said, however, that the NGCP welcomes the “long overdue” decision.
“We welcome the decision because it will give NGCP the chance to collect the under-recoveries considering the massive investments that have been infused into the transmission system since 2016,” she said.
In a 155-page decision, the ERC approved a maximum allowable revenue (MAR) of P335.78 billion for the NGCP for the period. MAR is the maximum amount the NGCP is allowed to take in annually to recover its operational expenses.
Following the decision, the NGCP is entitled to recover an additional P28.29 billion in under-recoveries. This translates to an additional P0.0384 per kilowatt-hour (kWh) which will be collected over the next 84 months from the issuance of the decision.
The grid operator confirmed that the collection will start with the July billing period, which will be reflected in electricity bills for August.
Julius Ryan D. Datingaling, head of business and regulatory development at NGCP, said that the collection will be reflected as a separate line item on the consumers’ electricity bills.
The Electric Power Industry Reform Act tasks the ERC to establish a method for setting transmission and distribution wheeling rates. The rates must be set in a way that allows the recovery of “just and reasonable costs and a reasonable return on rate base” to enable the entity to operate viably.
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.
Meanwhile, transmission charges for the June period, which will be reflected in the July electricity bills, increased 5.49% month on month to P1.2113 per kWh, driven by higher ancillary service (AS) charges.
AS charges, which are the pass-through costs for power supply that stabilizes the grid during instances of power supply-demand imbalance, increased 9.32% to P0.6182 per kWh.
Meanwhile, transmission wheeling rates, or what the NGCP charges for its primary service of delivering power, rose 0.39% to P0.4611 per kWh.
“For the July 2025 electric bill of the end consumers, NGCP charges only P0.46 per kWh for the delivery of its services,” the company said.
Transmission charges reflect the cost to deliver electricity from power generators to the distribution system. — Sheldeen Joy Talavera
