Electricity rates to fall this month, says ERC

Manila Standard Today

by Alena Mae S. Flores

Transmission charges will go down starting next month after the government approved a new maximum annual revenue target for National Grid Corp. of the Philippines.

The Energy Regulatory Commission approved an annual revenue of P46.284 billion for National Grid this year, which translates into a lower per kilowatt cost than the previous year.

National Grid said it would announce the effect of the ERC decision on transmission charges this week after an internal discussion.

The ERC said in a statement that the indicative equivalent monthly transmission charge of National Grid to customers would fall by an overall average of P2.64 per kilowatt to P364.27 per kW in 2011 from P366.92 per kW.

The average monthly reduction on per grid basis will amount to P2.38 per kW in Luzon, P0.09 per kW in the Visayas and P6.61 per kW in Mindanao.

ERC said National Grid would implement the reduced transmission charge starting with its January billing.

“We note that the [performance-based rating] scheme adopted for the transmission sector is beginning to reflect a favorable impact in terms of price on electricity consumers brought about by the lower indicative transmission charges for 2011 and onward,” ERC executive director Francis Saturnino Juan said.

Juan said that with the ERC approval, National Grid would aim to “be more efficient in its operations and aspire to deliver better quality power transmission services.”

ERC said the indicative average monthly transmission charge amounting to P364.27 per kW was inclusive of the so-called Performance Incentive Scheme reward and the power delivery service, system operator and metering service provider charges.

ERC on Nov. 22 last year issued the final determination of the maximum annual revenue of National Grid for the third regulatory period covering 2011 to 2015.

National Grid filed its application for 2011 based on the final determination issued by the ERC on Dec. 16.

The transmission rates charged by National Grid are based on the internationally-accepted rate-setting methodology, called the performance-based rate-setting scheme.