The Energy Regulatory Commission should investigate the high level of returns allowed transmission network concessionaire National Grid Corp. of the Philippines in its over 15 percent Weighted Average Cost of Capital.

"NGCP is still charging 15 percent for WACC which is too much, that is already robbery," according to former Energy Secretary Alfonso Cusi.

"The ERC should look into the WACC rate since it will be in the interest of consumers," according to Cusi.

Cusi lamented in the past that ERC failed to conduct a "reset" to determine the correct Maximum Annual Revenue for NGCP.

A reset will allow the just and correct profit rates for NGCP and thus electricity users could have enjoyed a significant decrease in their bills from 2016 onward.

ERC's inaction violated its own rules since the reset process is important as it determines the level of profit that the NGCP is allowed to charge consumers for electricity transmission.

The ERC, in 2015, increased NGCP's profit rates to allow its net income to grow from P43.1 billion in that year to P43.8 billion in 2016, and further increased it to P47.1 billion in 2020.

WACC and MAR fix NGCP's yearly profit which has been soaring since it acquired the contract with the government in 2009 based on data provided the Daily Tribune.

ERC's dragging its feet in the recomputation of the allowable net income for NGCP indicated that the agency is not doing its job as it periodically complains of inadequate resources to resolve the issue.

Temporary adjustment

Because of the failure to do the reset, the ERC implemented a profit rate which it termed Interim Maximum Annual Revenue.

One of the determinants of MAR is WACC which comprises around 66 percent of MAR and the others such as the return of capital, operations expenses, and taxes make up 34 percent.