THE ENERGY Regulatory Commission (ERC) said it hopes to resolve the rate review of the National Grid Corp. of the Philippines (NGCP) for the fifth regulatory period (5RP) by early next year.
“We are targeting to finish it as early as possible,” ERC Chairman and Chief Executive Officer Francis Saturnino Juan told reporters, referring to the 5RP, which covers the years 2023-2027.
Mr. Juan said the ERC is deliberating the NGCP revenue application to determine which policies or decisions to apply.
“And then based on these policies, we will calculate and then we will go back to the commission meeting,” he said. “We will discuss again until we are able to decide all the components of the rate. And then we can come out win a final determination.”
The Electric Power Industry Reform Act tasks the ERC to establish a method for setting transmission and distribution wheeling rates. The rates must be set in a way that allows the recovery of “just and reasonable costs and a reasonable return on rate base” to enable the entity to operate viably.
The rate reset process is usually a forward-looking exercise that requires the regulated entity to submit forecast expenditures and proposed projects.
In April, the ERC rendered its decision on NGCP’s 4RP, covering the years 2016-2022, allowing the company to collect a total under-recovery of P28.3 billion from consumers.
The NGCP is the country’s sole grid operator. Holding a congressional 50-year franchise, the company has the right to operate and maintain the transmission system and related facilities. — Sheldeen Joy Talavera