The Energy Regulatory Commission (ERC) has given the go-ahead for the National Grid Corporation of the Philippines (NGCP) to start implementing its staggered cost recovery totaling at least PHP 28.29 billion beginning August billing month, following the completion of the utility’s fourth regulatory reset.

“I think the (increase) will take effect starting in the next billing period,” said ERC Chairperson and CEO Monalisa C. Dimalanta during an event in Pasig City on Monday.

Although the decision was finalized in April, Dimalanta noted the delay in issuance stemmed from the time required to finalize the ruling, BusinessWorld reports. “Understandably, something as thorough as a rate reset takes time to write. It took some time to write… the actual final determination,” she added.

The decision allows NGCP to recover under-recoveries amounting to PHP 28.29 billion over a seven-year period, equivalent to an additional PHP 0.1013 per kilowatt-hour (kWh) in transmission charges for the next 84 months. This includes PHP 0.0629 per kWh as an average increase in the basic transmission charge and PHP 0.0384 per kWh for the under-recovered portion of the increased maximum allowable revenue (MAR).

The ERC’s 155-page decision was approved by a majority composed of Commissioners Alexis M. Lumbatan, Floresinda G. Baldo-Digal, and Marko Romeo L. Fuentes. Chairperson Dimalanta and Commissioner Catherine P. Maceda dissented.

The approved MAR of PHP 335.78 billion covers the 2016–2022 regulatory period. The MAR refers to the ceiling on annual revenue NGCP is allowed to earn to recover its operational costs, subject to the ERC’s rate-setting framework under the Electric Power Industry Reform Act (EPIRA).

The rate reset is a routine regulatory review designed to evaluate performance and cost forecasts of regulated utilities to ensure fair pricing while maintaining viability. NGCP began operating the country’s transmission network in 2009 under a 50-year franchise granted by Congress.

What are your thoughts on the NGCP’s cost recovery and the impact on transmission charges? Join the discussion and share your insights.

Follow Power Philippines on Facebook and LinkedIn or join our Viber community to stay up to date on the latest energy news.