February 4, 2023

Eureka News

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NGCP seeks government approval for transfer rate reset

The Energy Regulatory Commission (ERC) will begin reviewing the National Grid Corporation of the Philippines (NGCP) request for a transmission rate reset next month.

ERC Chair Monalisa C. Dimalanta said NGCP’s proposal is a “positive development” in overcoming the long regulatory delay in the energy sector.

“We are encouraged by NGCP’s cooperation in submitting its price adjustment request. We see this as an alignment of interests between regulators and energy stakeholders to move our energy sector towards a regime with a higher level of compliance and accountability,” said Dimalanta.

The grid operator last Dec. 22 filed a request to roll back the transmission rates billed to all electricity end-users in the country. The price adjustment is expected to result in lower transmission fees for the benefit of electricity consumers.

NGCP’s request comes after the ERC rejected its omnibus request to hold the tariff reset in limbo until the ERC held another public consultation round on the rules, and after the ERC specified provisions in the amended rules for the setting of Transmission rates (changed RTWR) has clarified. The ERC rejected NGCP’s request on November 25, arguing that since 2014 there had been several public consultations on the RTWR amendments, all with NGCP participation.

It is recalled that on 28 September the ERC published Resolution No. 08, Series of 2022 or the amended RTWR. The revised RTWR includes the rate adjustment for the fourth and fifth regulatory periods covering the years 2016 to 2022 and the years 2023 to 2027, respectively. 2015 covers.

The NGCP proposal covers the fourth regulatory period. Simultaneously with filing the application, NGCP also submitted a Rulemaking Motion to change the fourth regulatory period coverage in the amended RTWR to 2016-2020.

Meanwhile, NGCP has also complied with the ERC’s order to pay 5.1 million pesos in penalties for non-compliance with the Department of Energy’s (DOE) circular requiring procurement of reserves. The fine was paid on November 21.

It is recalled that the ERC ruled that NGCP violated Sections 7.4 and 7.5 of DOE Department Circular No. DC2021-10-0031 entitled “Prescribing the Policy for the Transparent and Efficient Procurement of Ancillary Services by the System Operator” (AS-CSP Policy ).

The AS-CSP policy requires that any ancillary service or reserve required by the network be procured according to an open and competitive process under a fixed contractual agreement. This aims to improve transparency, competitiveness and wide dissemination of opportunities among qualified institutions. It is critical to energy security that NGCP meets and maintains required reserves.