LOWER transmission charges after ERC grants NGCP with interim max revenues for 2020
The Energy Regulatory Commission (ERC) has granted the National Grid Corporation of the Philippines (NGCP) with a maximum annual revenue of P47.05 billion for 2020 which will result in lower transmission charges.
The regulatory body this will effectively reduce the existing transmission charge by P0.0413 from the P0.5114 per kilowatt hour (kWh) in 2019 to P0.4701 per kWh this year.
“…The lowering of the transmission rate is again, one of the efforts of the commission to provide relief to all the electricity consumers, especially those that are economically disadvantaged who lost their jobs and earnings due to the implementation of the enhanced community quarantine,” said Agnes Devanadera, ERC’s chairperson and chief executive officer.
Devanadera said in a statement NGCP’s last adjustment of its interim maximum annual revenue (iMAR) was in 2016 and the increase in revenues from 2016 to 2020 would allow the systems operator to augment its capital expenditures requirements in order to address the forecasted increase in demand for 2020.
The ERC said there were variances in the computations of capex between the NGCP and the ERC that also caused the granting of lower iMAR.
“This brings a favorable rate impact on the consumers as this will mean a lower transmission charge for this year. The lowered transmission charge will be effective upon NGCP’s receipt of the relevant ERC order,” Devanadera added.
NGCP collects the iMAR from distribution utilities and electric cooperatives that use the country’s transmission facilities. The power distributors meanwhile compute the equivalent of these transmission charges to determine the transmission rate impact on the electricity end-users.
NGCP is mandated to annually apply for its iMAR as part of the annual verification and adjustment of tariffs allowed under the Electric Power Industry Reform Act of 2001 to ensure fair pricing of power to end users as well as for the grid operator to be able to implement its capital expenditure programs.
However, due to various manpower issues recently experienced by the ERC, it has not managed to issue NGCP with an iMAR from 2017 to 2019 but has adjusted it accordingly on this year’s rates.
