Wednesday, February 15, 2017

NGCP collecting P2-billion shortfall in 2016 energy transmission charges

Posted on February 15, 2017

PRIVATELY OWNED system operator National Grid Corp. of the Philippines (NGCP) has started collecting this year a transmission charge amounting to P2 billion, representing the difference between what the Energy Regulatory Commission (ERC) provisionally approved and the final amount it cleared.

“What we collected from January to December [2016] was based on an iMAR of P41 billion,” said NGCP Spokesperson Cynthia P. Alabanza, referring to the interim maximum annual revenue (iMAR) provisionally approved by the ERC for last year.

In a briefing on Tuesday, Ms. Alabanza said NGCP applied for the recovery of P45 billion, but the ERC gave its interim approval for P41.654 billion. The final approval, which came out in December, was for P43.789 billion, or P2.135 billion lower than what the grid operator collected.

“So we have unrecovered revenue for 2016,” she said.

NGCP runs the grid operation and maintenance business on a regulatory period spanning five years. It is now on its fourth period, which covers 2016 to 2020, for which it is awaiting “final determination” from the ERC.

“There was no actual increase in revenue,” she said. “These [the collected amount] are all going back to the grid as investment. These are backbone projects.”

In February, the pass-on cost for transmission services amounted to 15 centavos per kilowatt-hour, which NGCP said represented the allowed revenue recovery and the cost for ancillary services, which varies monthly depending on power supply and demand.

Mark Anthony S. Actub, NGCP deputy general counsel, said that ahead of the approval of the fourth regulatory period, the ERC had cleared the collection of P43.789 billion as interim maximum annual revenue.

In effect, the NGCP officials said the increase this year was “artificial” since what should have been collected in 2016 was only moved to 2017.

“We are waiting for guidance. There are steps that should have been taken earlier,” said Ms. Alabanza. “We’re waiting for the issuance of ERC’s position paper, which contains what [it] wants from us.”

This year, NGCP has lined up 20 capital expenditure projects with various completion dates. These include substation expansion and transmission line improvements.

The projects include two 500-kilovolt transmission lines for Calaca-DasmariƱas and Hermosa-San Jose, an extra-high voltage facility for Pagbilao, a 230-kilovolt backbone project for Cebu-Negros-Panay, a similar one for Mindanao and for Tuguegarao-Magapit. Voltage improvement projects are also to start in Luzon and the Visayas.

On Friday, Manila Electric Co. cited NGCP’s transmission charge as one of the reasons for the increase in electricity rates in February. It said the charge imposed by NGCP rose by 15 centavos per kilowatt-hour because the increase of the power delivery service charges after the grid operator implemented the higher iMAR. It also said higher ancillary service charges also contributed to the increase. -- Victor V. Saulon

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