Power rate hike on the horizon

Power consumers may see an increase in transmission charges once the Energy Regulatory Commission (ERC) finalizes the amount the country’s grid operator will recover for its spending over the last few years.

In a message to the Inquirer on Friday, ERC chair and chief executive Monalisa Dimalanta said they estimated a potential hike in transmission rates of around 13 centavos per kilowatt-hour (kWh).

Transmission charges usually account for 3 percent of a monthly electricity bill. October power bills showed the transmission wheeling rate, or what the National Grid Corp. of the Philippines (NGCP) charges for delivering power, was 49 centavos per kWh.

READ: Meralco: Power rates to drop P0.3587 per kWh this October

The amount was arrived at after the ERC determined the NGCP has yet to recover about P3.5 billion for services and developments it said it had introduced to the grid for the years 2016 to 2022.

“If the amount is finalized, it will result in an increase of around 13 centavos per kWh, because from their actual collections for 2016 to 2022, they still need to recover around P3.5 billion,” she said.

This, after the ERC capped NGCP’s allowable revenue at P310 billion for the period in review. This is more than half of the P552 billion the grid operator had asked to be approved for its fourth regulatory reset.

“Out of P520 billion claimed by NGCP, they were only able to substantiate P310 billion. But the P310 billion includes amounts spent for projects that have not yet been completed or commissioned,” Dimalanta added.

Nearing a decision

Under a rate reset process, a regulated entity such as NGCP is obliged to submit to the ERC its spending and proposed projects over a period, usually 5 years unless extended by the regulator. It would then evaluate how much should be passed on to consumers.

According to the ERC, the draft results for the regulatory period took into account comments made by the NGCP and other intervenors.

The decision would again be subject to comments from power stakeholders.

“We will finalize within the year,” she said of the amount that NGCP would be able to finally pass on to consumers.

NGCP was unavailable for comment as of press time.

In a separate statement, Dimalanta said: “This step takes us to a pivotal point of the reset process for the transmission sector.”

“The Commission has fervently acted on its duty to conduct the long-delayed reset of the rates of our regulated entities. Our mandate requires nothing less from ERC as the sole regulator of the power sector to ensure greater compliance and accountability,” she added.