Deputy Minority Leader and ABANG LINGKOD Party-List Rep. Joseph Stephen Paduano is convinced that the operations of transmission company National Grid Corporation of the Philippines (NGCP) did not cause the electric bill shocks during the Enhanced Community Quarantine (ECQ) period.
Energy Regulatory Commission (ERC) Chairperson Agnes Devanadera had said during a House Committee on Energy hearing that the NGCP had nothing to do with the spike in electric bills.
“It’s been going around that NGCP is one of the reasons why there is a spike in electric bills. As of now, napakalinaw, categorical yung sagot ni ERC Chair na NGCP has nothing to do with it, yung sa spike ng electric bills (It’s very clear, the ERC Chair gave a categorical answer that the NGCP has nothing to do with it, the spike in electric bills),” he said in an interview Wednesday.
Paduano specifically sought clarification last July 2 whether or not the NGCP’s Interim Maximum Annual Revenue or IMAR had impacted the electricity rates as alleged. “I asked the question because I wanted to clear it up if one of the causes of the spike was the transmission utility,” he said.
Devanadera said the IMAR approved by the ERC in February, 2020, does not affect the present electricity rates and could not have led to the recent electric bill shocks. She said the approved IMAR reflected lower annual revenue for NGCP that caused the reduction in the transmission tariff.
The NGCP’s Maximum Annual Revenue or MAR is renewed by the ERC every five years. The scheme is currently on an interim basis, thus, the IMAR, because administrative issues faced by the ERC during the time of the previous cycle delayed the reset of NGCP’s regulatory timeline.
As the term implies, the MAR is the maximum revenue that NGCP is allowed to earn yearly from its transmission operations, or the process of transporting electricity from power generators to distributors. Distributors, like the Manila Electric Company (Meralco), are the ones that power up consumers’ homes.
Last April or during the height of the COVID-triggered lockdown, the ERC granted the NGCP an interim relief to implement its IMAR for this year amounting to P47.051 billion. This was done to lower electricity rates, the ERC said. As a result, the transmission charge fell to P0.4701 per kilowatt-hour (kwh) this year from P0.5114 per kWh in 2019.
Paduano recalled that Deputy Speaker and Laguna 1st district Rep. Dan Fernandez floated the IMAR allegation during a previous hearing of the Committee on Good Government and Public Accountability which tackled the exorbitant power bills during the ECQ. However, the NGCP’s supposed hand in the electric bill controversy wasn’t thoroughly discussed by the panel since the hearing’s agenda focused only on power distribution matters, not transmission.
He said he expects Fernandez to file a resolution probing NGCP’s IMAR. “I will just wait for the resolution. But personally, my doubts were answered by the regulatory body.”
Paduano added: “I will not think twice if ever that issue will be raised again. I will directly ask again the ERC and let the NGCP explain.”