Electricity rates seento go down

Manila Times.net
BY EUAN PAULO C. AÑONUEVO REPORTER

ELECTRICITY rates across the country are expected to go down this month after regulators slashed the power grid operator’s transmission charge. In a decision, the Energy Regulatory Commission (ERC) over the weekend said that it has given the National Grid Corporation of the Philippines (NGCP) the green light to collect a Maximum Annual Revenue (MAR) of P46.3 billion in 2011.

As a result, NGCP’s transmission charge is expected to decrease by a monthly average of P2.64 from P366.92 a kilowatt in 2010 to P364.27 a kilowatt in 2011. 

On per grid basis, the average monthly reduction will be P2.38 a kilowatt-month for Luzon; P0.09 a kilowatt-month for the Visayas and P6.61 a kilowatt-month for Mindanao. 

NGCP is the concessionaire that operates the country’s power transmission system, which brings electricity from generating plants to distribution utilities. 

As of end-2009, the country’s virtual power highway was made up of 19,425 circuit kilometers of transmission lines and 23,853 megavolt-amperes of sub-station capacity.

The company is made up of the SM Group’s Monte Oro Grid Resources Corp. and Calaca High Power Corp. and State Grid Corporation of China.

The transmission rates charged by NGCP are based on the performance-based regulation (PBR). 

PBR is an internationally accepted rate-setting methodology mandated by the ERC that allows NGCP to adjust its rates within a regulatory period based on spending requirements and quality of service.

NGCP initially applied for higher MAR under its third regulatory period, which covers 2011 up to 2015, that would have resulted in an increase in transmission rates.

Out of the P291.08 billion the grid operator sought, however, the ERC only approved a MAR of P198.81 billion late last year. 

The regulator had said that the decrease in transmission charges stemmed from lower revenue requirement it determined such that “the NGCP can still operate efficiently even with a lower operating budget.”

The ERC initially estimated NGCP’s transmission charges to go down to b P364.75 in 2011; P362.43 in 2012; P360.54 in 2013; P359.37 in 2014; and P358.39 in 2015.

The ERC’s decision, however, is still open to an appeal by NGCP and further public consultations.