NGCP Rates Cut P46.87/Kw Monthly

Manila Bulletin
By MYRNA M. VELASCO
January 28, 2012, 12:13am


MANILA, Philippines — Starting this January billing cycle, the wheeling rate of the National Grid Corporation of the Philippines (NGCP) to load customers will be slashed by P46.87 per kilowatt per month (kW/month) to P317.63 from last year’s P364.51 per kW/month.


The rate translation to end-consumers to be billed as transmission charge then will also be lower. The rate cut will likely reflect in the bills this February.


The reduced tariff of the grid operator was due to the provisional ruling of the Energy Regulatory Commission (ERC) trimming down its maximum allowable revenue (MAR) to P40.350 billion for 2012 from the previously regulatory year’s P44.889 billion. It is also lower than the P47.775 billion applied for by the transmission firm.


“The computation of the PDS (power delivery service) rate is exclusive of the PIS (performance incentive scheme). Notably, the effective MAR for CY (calendar year) 2012 is reduced by P4.538 billion … the indicative equivalent charge is reduced by P46.87/kW/month,” the ERC ruling has stipulated.


The breakdown of NGCP’s allowable revenues for this year will be as follows: P29.843 billion for Luzon grid; P5.035 billion for Visayas; and P5.471 billion for Mindanao.


The ERC noted that these shall be based on calculated billing determinant which has been placed at 123,811 megawatts per month.


The regulator acknowledged that there has been discrepancy in the computation of NGCP to that of the ERC because of the use of differing reference MAR for 2011. The applicant-firm factored in a MAR of P45.369 billion; while the regulator set it lower at P42.365 billion.


Similarly, the regulatory body has allowed NGCP to start billing this January its PIS reward claims of P503 million. This is related to the grid operator’s performance level – entailing that it surpassed guaranteed service levels, hence, it will be entitled to reward claims instead of penalties under the PIS scheme.


“Notwithstanding the consideration of the PIS reward, the net impact on the rates still results to a reduction,” the ERC has emphasized.


Under the performance-based ratesetting (PBR) methodology, a regulated entity like the NGCP, is mandated to file for a five-year rolling revenue requirement, which will then be translated to per kilowatt hour (kWh) charge to consumers.


Anchored on that five year profitability projections, regulated utilities will still need to file annually for updated tariff translations; and such will include adjustments for over- and/or under-recoveries on their rates pass-on. (MMV)