NGCP seeks regulatory approval for higher revenues

MANILA, Philippines - The National Grid Corp. of the Philippines (NGCP) is seeking regulatory approval for higher allowable revenues next year.

In a regulatory filing, the transmission service provider applied for P44.977 billion in allowable revenue (MAR) for next year.

“We applied for P44.98 billion. The approved MAR for 2012 is at P40.35 billion. Hopefully it will be approved by the ERC,” said Agnes dela Cruz, head of Tariff, Design and Wheeling Management Division of NGCP.

Dela Cruz said the proposal for higher revenues was driven by the use of the 2006-based consumer price index.

Billing determinant like demand for electricity and increased use of the transmission lines was also taken into consideration.

For instance, Dela Cruz said the six-percent demand growth in franchise areas of Manila Electric Co. (Meralco) required a three-percent increase in NGCP services.

“The transmission customers in Luzon, Visayas and Mindanao will be billed based on their respective power delivery service rates,” NGCP said.

Specifically, the company aims to collect as much as P33.625 billion by servicing Luzon, P5.348 billion in Visayas and P6 billion in Mindanao.

NGCP is also seeking approval to collect P642.08 million under the Performance Incentive Scheme (PIS).

The NGCP recovers its investments through fixed rates added to consumers’ electricity bills. If approved, the rates will be in effect starting January next year.

“The proposed MAR and PIS were designed and developed in accordance with the provisions of the Rules for Setting Transmission Wheeling Rates and other pertinent issuances of [the ERC],” NGCP said.

“The issuance of a provisional authority will allow NGCP to timely implement its capital expenditure programs and cover its operation and maintenance expenditures for calendar year 2013,” NGCP said.

“Also, the timely implementation of the rate translation of the MAR will reduce, it not eliminate, the risk of under recovery, which is substantial to NGCP,” it added.

NGCP is a private firm in charge of operating, maintaining, and developing the country’s power grid and electricity superhighways.

The NGCP allotted roughly P100 billion in capital spending for the creation of new transmission lines and substations, and the expansion of existing facilities nationwide in the next 10 years.

The Transmission Development Plan targets improving power transmission nationwide through the installation of new system reinforcements, development of alternative transmission corridors, prevention of heavy loading and upgrade of existing facilities for the NGCP to be the strongest power grid in Southeast Asia.