Danessa Rivera (The Philippine Star)
- July 9, 2020 - 12:00am
MANILA, Philippines — The Energy
Regulatory Commission (ERC) said the National Grid Corp. of the Philippines
(NGCP) would not implement the approved increase in its interim maximum
allowable revenue (IMAR) this year.
The implementation of the IMAR of
grid operator NGCP has been unilaterally deferred, ERC chairperson Agnes
Devanadera confirmed during a Senate hearing Monday.
This followed the pronouncement of
enhanced community quarantine across the country in March due to the
coronavirus disease (COVID-19) pandemic, she said.
“NGCP, on its own, informed us that
they are not implementing,” the ERC chief said.
Last Feb. 13, the ERC commission en
banc allowed NGCP to implement an IMAR of P47.051 billion this year. Last
year, NGCP’s IMAR was P43 billion.
“If you read the decision, it was
approved by the ERC because it will help lower rates,” Devanadera said.
The approved IMAR of P47 billion is
P11.8 billion lower than NGCP’s proposal of P58.8 billion,
which was filed before the commission last October 2019.
The iMAR 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.
In the June 3 House Committee on
Good Governance hearing, ERC spokesperson Floresinda Digal said the approved
IMAR was not supposed to reflect an increase in the transmission charge.
In fact, the existing transmission
charge would have been reduced by P0.0413 per kilowatt-hour (kwh) to P0.4701
per kWh.
“Per our evaluation at that time,
considering the data and information that we have, the approved IMAR is
supposed to have lower transmission rates by four centavos coming from 51
centavos [per kwh] of 2019. With the interim relief granted in February 2020,
we have simulated 47-centavo [per kwh] transmission charge, so it should have
been four centavos [per kwh] lower,” she said.
In approving the latest IMAR, the
NGCP’s last adjustment of IMAR was in 2016. It said the increase in revenues
from the 2016 level to the 2020 level would allow NGCP to augment its capital
expenditures requirements in order to address the forecasted increase in
demand for 2020.
When asked by Sen. Risa Hontiveros
on whether this deferment would be observed until the end of the year,
Devanadera said it was NGCP who stated they would defer.
NGCP’s IMAR, which is used for
transmission projects and other grid investments based on the Department of
Energy (DOE)’s Power Development Plan, is subject to ERC’s approval for every
regulatory period.
However, administrative concerns
faced by the ERC in 2015 and 2016 which included constraints in the procurement
of regulatory experts, resulted in the delay of the reset process for NGCP’s
4th Regulatory Period.
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