ERC allows NGCP to hike revenue target

The Energy Regulatory Commission ( ERC) has allowed the National Grid Corp. of the Philippines ( NGCP) to raise its revenue target to P43.79 billion for 2016.

The revised interim maximum annual revenue (iMAR) is higher than the P41.65billion approved by ERC last year.

The MAR refers to the maximum revenue that NGCP is allowed to earn from its transmission operations, or the process of transporting electricity from power generators to distributors.

The change in the revenue target followed NGCP’s appeal to reconsider ERC’s computation, which the former said is not based in the Rules for Setting Transmission Wheeling Rates (RTWR).

The RTWR sets out the principles that the commission should comply with for purposes of regulating the maximum transmission wheeling rates that may be charged for the provision of its regulated transmission services during a regulatory period.

It also sets the annual rate verification and adjustment process which the commission should undertake in relation to the maximum transmission wheeling rates that may be charged for the provision of its regulated transmission services during a regulatory period.

But since the year has come to a close, ERC allowed NGCP to collect the difference between the provisionally approved iMAR and the revised amount in 2017.

The power regulator also said the approved revenue target is just an interim rate until the ERC decides on the fourth regulatory period.

“The herein approved iMAR shall still be subject to adjustment once the Commission issues the Final Determination for the Fourth Regulatory Period for NGCP,” the ERC order read.

The fourth regulatory period covers 2016 to 2020 but the ERC has yet to come out with a decision on the maximum transmission wheeling rates for the said period.

NGCP is a privately-owned corporation in charge of operating, maintaining, and developing the country’s power grid.

The consortium, which holds the 25-year concession contract to operate the country’s power transmission network, is composed of Monte Oro Grid Resources Corp. led by Henry Sy Jr., Calaca High Power Corp. of Robert Coyiuto Jr., and the State Grid Corp. of China as technical partner.