The Energy Regulatory Commission (ERC) has announced that transmission firm National Grid Corporation of the Philippines (NGCP) has already filed an application for its tariff adjustment that is expected to result in lower electricity rate to be implemented next year.

The regulatory body has not given details of the rate adjustment petition, but categorically stated that this will result in lower electricity rates to be paid for by Filipino consumers starting 2023. NGCP filed the rate adjustment application on Dec. 22, 2022.

“The rate reset is expected to result in lower transmission charges for the benefit of electricity consumers,” adding that “NGCP’s application is a positive development towards resolving the long regulatory lag in the energy sector,” ERC Chairperson Monalisa C. Dimalanta emphasized.

“ERC will commence next month the hearings on the application and the process of verification of the completeness and accuracy of the information submitted by NGCP,” the Commission stated.

The ERC qualified that NGCP was compelled to file its rate reset application following denial of its omnibus motion to delay the process – that was based on a ruling rendered by the regulatory body last month.

With NGCP’s move on its rate filing, Dimalanta said “We view this as an alignment of interests among the regulator and energy stakeholders to pursue moving our energy sector towards a regime of higher level of compliance and accountability.”

As noted by the regulatory agency, the application of NGCP’s rate adjustment had been anchored on the amended rules for setting transmission wheeling rates (RTWR) that was issued last September.

The modified RTWR, according to the ERC, shall cover the rate reset for the fourth regulatory period from 2016 to 2022,and then the fifth regulatory period stretching from 2023-2027. The last time the NGCP rate was adjusted had been way back 2015.

In the restructured power sector, the methodology of calculating the tariffs being passed on by regulated power utilities – including NGCP – is anchored on performance-based rate setting (PBR) and this is calculated on a forward-looking approach covering at least four years.

Separately, the ERC declared that NGCP complied with the agency’s order for it to pay the penalty of P5.1 million that had been meted due to the firm’s non-compliance to a Circular of the Department of Energy (DOE) on its mandate to procure power reserves.

Securing power reserves or ancillary services is a requirement for prudent and reliable operations of the electricity system, a function vested upon NGCP being the operator of the country’s power transmission backbone.