ERC sets NGCP 2023-27 maximum allowable revenue at P376.4B
From AB Capital's The Opening Bell: Three Moves
Event
The ERC approved National Grid Corp.’s 5th Regulatory Period maximum allowable revenue (MAR) at P376.4 billion for 2023-2027, below the P442.6 billion proposed by NGCP. Annual MARs ramp from P63.4bn in 2023 to P88.5 billion in 2027, completing the delayed rate reset.
View
A lower-than-ask outcome is expected and consistent with prior resets. Importantly, the approved MAR is higher than the P335.8 billion allowed in the 4RP, and broadly aligned with NGCP’s approved capex trajectory for grid reinforcement, improving earnings and cash flow visibility.
Catalyst
Key catalysts include implementation of transmission charges and ERC approvals of ongoing capex and large projects which support system reliability. Risks remain around final capex cost validation and execution delays.
Action
Constructive for transmission and the broader power sector. Investors can gain exposure via SGP, NGCP’s listed parent. While higher MAR may increase power costs, it underpins grid reliability and supports renewable integration.
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