ERC starts dialogue on NGCP rates reset
We are encouraged by NGCP’s cooperation in filing its application for a rate reset
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We are encouraged by NGCP’s cooperation in filing its application for a rate reset
The Energy Regulatory Commission will start deliberating the application of the National Grid Corporation of the Philippines for the resetting of the transmission rates charged to all electricity end-users by January.
ERC chairperson Monalisa Dimalanta said over the weekend that the power regulator will verify the completeness and accuracy of the information submitted by NGCP.
"We are encouraged by NGCP's cooperation in filing its application for a rate reset. We view this as an alignment of interests among the regulator and energy stakeholders to pursue moving our energy sector towards a regime of a higher level of compliance and accountability," Dimalanta said.
Dimalanta also noted that NGCP's application is a positive development toward resolving the long regulatory lag in the energy sector since the rate reset is expected to result in lower transmission charges for the benefit of electricity consumers.
Last 22 December, the NGCP applied the resetting of the transmission rates before the ERC.
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NGCP's application comes after the ERC denied its Omnibus Motion to hold the rate reset in abeyance until the ERC holds another round of public consultation on the rules and after the regulator has clarified certain provisions in the amended rules for setting transmission wheeling rates.
The application filed by NGCP covers the Fourth Regulatory Period.
Simultaneous to the filing of the application, NGCP also filed a petition for Rulemaking to change the coverage of the 4th Regulatory Period in the Amended RTWR to 2016 to 2020.
Transmission reset is regularly done to check whether the allowed revenues of NGCP approved seven years ago are still valid, reasonable, and reflective of the current costs for consumers.
The last transmission reset was done for regulatory periods covering 2011 to 2015.
Compliant NGCP
In another related development, the ERC also said the transmission operator paid its P5.1 million fine for non-compliance with the circular issued by the Department of Energy requiring the procurement of reserves last 21 November.
In a decision dated 24 October, 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."
The AS-CSP Policy requires all ancillary services or reserves required by the grid to be procured under an open and competitive process under a firm contracting agreement. It aims to improve transparency, competitiveness, and wide dissemination of bid opportunities among qualified facilities.
For energy security, the ERC reiterated that NGCP must meet and maintain the required reserve levels.
