MANILA, Philippines – The Energy Regulatory Commission (ERC) has lowered the revenue target of the National Grid Corp. of the Philippines (NGCP) for 2016 compared to what it had applied for.
The grid operator had sought clearance for an interim maximum annual revenue (iMAR) of P45.29 billion this year.
However, the power regulator has sanctioned only P41.65 billion in iMAR for 2016, or lower by P3.63 billion from the previous revenue cap.
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.
ERC chairman Jose Vicente Salazar said the approved iMAR is lower by P1.43 billion compared with the P43.08 billion MAR in 2015.
In terms of rate impact, it translates to P0.5686 per kilowatt-hour, a reduction of P0.048 per kwh from P0.6196 per kwh the previous year.
This, however is just an interim rate until the the ERC decides on the Fourth Regulatory Period.
“In light of the pendency of the reset process for the Fourth Regulatory Period, this iMAR 2016 value is merely an interim approach. Thus, it is still subject to adjustment once the Commission issues the Fourth Regulatory Period final determination for applicant NGCP,” the ERC said in its decision.
Salazar explained further that the approved rates is still subject to true-up and adjustments for over and under-recoveries.
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.