MANILA, Philippines -The Energy Regulatory Commission (ERC) will begin the year with the continuation of its full review of National Grid Corp. of the Philippines’ (NGCP) expenditures from 2016 to 2022 despite NGCP’s move to file a temporary restraining order (TRO) against this in the Supreme Court.
Speaking to reporters last week, ERC Chair Monalisa Dimalanta said they had not received orders from the high court to halt its review that would set NGCP’s rates in the covered period.
According to Dimalanta, NGCP had argued that the fourth regulatory period should only cover 2016 to 2020, and that the ERC should not opt for a historical review to determine the grid operator’s rates in past years.
Dimalanta said they received a copy of NGCP’s Supreme Court filing in early December.
“We will continue [with the review] while there is no legal directive for us to stop, and we’re keen on completing the long overdue reset anyway,” she said, adding that they were waiting for more data from consultants to support the regulator’s assessment.
ERC’s review of NGCP’s expenditures is being highly contested mainly because the regulator typically sets rates prior to implementation. This was applied until the third regulatory period covering 2011 to 2015.
However, the regulatory lag delayed the ERC’s review of the 2016 to 2022 rates, forcing the agency to set rates based on historical data provided by NGCP.
The fourth regulatory period originally covered only 2016 to 2020, but the commission later amended this to cover expenditures until 2022 and cut delays.
Dimalanta said they had already expected NGCP to file for the issuance of a TRO against the amended rules that were issued in September 2022.
“We respect all remedies available to all parties, so we’ll wait for the instructions of the Supreme Court,” Dimalanta added.
NGCP has yet to respond to requests for comment.
Disallowances
In November last year, the ERC flagged NGCP for spending billions on corporate social responsibility, public relations and other miscellaneous items that it said should not be included in the operating and maintenance costs NGCP passed on to consumers.
Dimalanta had pointed out that these expenditures were disallowed and were among the expenses that her office had taken out of NGCP’s maximum allowable revenue (MAR) for the 2016 to 2020 period.
MAR is the maximum amount approved by the ERC as regulator that NGCP is allowed to earn to recover its operating expense and capital expenditures.
The ERC had found that NGCP should have a MAR of only P183.49 billion for the five-year period, or 52.7 percent lower than the P387.8 billion in actual revenues made by the company. —Meg J. Adonis INQ