Nat’l Grid to pass on repair costs

MANILA, Philippines - The National Grid Corp. of the Philippines (NGCP), the country’s transmission highway operator, will pass on to consumers the cost of repairing transmission lines and substations damaged by Typhoons Santi and Vinta last year.

The move comes amid debates on the Manila Electric Co. (Meralco)’s petition for a hefty increase of P4.15 per kilowatt-hour.

In a television interview yesterday, Energy Regulatory Commission (ERC) executive director Francis Juan said the NGCP has filed its intention to raise transmission charges to recover cost of repair for its towers and transmission lines damaged by the two typhoons.

NGCP spokesperson Cynthia Manrique, head of revenue and regulatory affairs, yesterday said cost recovery is allowed but would need ERC approval.

Manrique also said should there be any rate hike, it would not be implemented this year.

She said the NGCP would also seek to recover the cost of repair of the damage caused by Super Typhoon Yolanda.

The corporation has yet to determine the total amount it spent on the repair of broken facilities.

“We have not filed for that,” she said in a briefing.

Juan said regulators would still have to deliberate on NGCP’s rate hike application.

Energy Secretary Carlos Jericho Petilla, for his part, said over radio dzRH that it is up to the ERC to review NGCP’s petition, which would be less than the amount advanced by the government for the repairs.

He earlier said President Aquino approved an advance payment of P1.5 billion for restoration, which should be deducted from NGCP’s rate hike petition.

The NGCP has yet to provide the actual amount of restoration costs, particularly for 240 towers destroyed by Yolanda.

Revenue generation

The ERC had earlier given the NGCP the green light to generate revenues of up to P42.5 billion this year.

The ERC approved NGCP’s maximum allowable revenue (MAR) of P42.5 billion for 2014, acting on NGCP’s application filed in October.

The approved MAR, which is lower than the P44.5 billion for 2013, will translate to an average monthly transmission rate of P308.67 per kwh, lower by 27.76 percent compared to the previous year’s P336.43 per kwh a month transmission rate.

The MAR refers to the maximum revenue that NGCP is allowed to generate from its transmission operations. Transmission refers to the process of transporting electricity from power generators to distributors such as Meralco and electric cooperatives, which in turn distribute the electricity to end-users.

NGCP is a privately owned corporation in charge of operating, maintaining and developing the country’s power transmission network.

It is a joint venture between State Grid Corp. of China and Henry Sy Jr., the eldest son of mall magnate Henry Sy, whose company operates the SM Mall chain.

The company won a 25-year concession to run the country’s transmission assets after it took over the management of the country’s national transmission network in 2008 from the state-owned National Transmission Corp.

Wicked plan

The umbrella group Bagong Alyansang Makabayan (Bayan), on the other hand, yesterday expressed belief that the government should not earn revenues from a power rate increase that is considered onerous and questionable.

The group has long campaigned for the scrapping of the value added tax (VAT) on power rates and cites the latest rate hike of Meralco as another reason to abolish the special levy.

The VAT on power and petroleum products was introduced during the Arroyo administration and has since become a burden to consumers.

Meralco’s proposed rate hike of P4.15 per kwh is inclusive of a 70-centavo VAT. – With Rhodina Villanueva