The Energy Regulatory Commission (ERC) has approved an annual revenue requirement (ARR) of P374.98 billion for the National Grid Corporation of the Philippines (NGCP) for years 2023 to 2027.
The ARR represents the amount the NGCP needs to recover to cover its operating costs, maintenance expenses, and approved investments. The ERC-approved ARR is 15.28 percent lower than the P442.60 billion application of the grid operator.
“The decision strikes a balance between ensuring adequate funding for critical power infrastructure, and safeguarding consumers from excessive transmission charges,” the ERC stressed. “Only costs and investments that passed regulatory scrutiny were included in the approved revenue cap.”
The approval covers NGCP’s Fifth Regulatory Period, or a regulatory reset, a periodic review in which the ERC examines a utility’s costs, investments, and performance and then sets revenue limits to ensure reliable service while protecting consumers from excessive charges.
This includes capital expenditures (capex) under recoveries for both the fourth and fifth regulatory period.
“The approved capex will support grid upgrades, system reinforcements, and new transmission projects necessary to meet the growing electricity demand and improve the reliability of power supply nationwide,” the ERC said in a press release Feb. 10.
It added that the maximum allowable revenue (MAR) being implemented still covers the fourth regulatory period. The Commission completed the fourth regulatory period rate reset in 2025, covering the years 2016 to 2022.
MAR is the revenue ceiling, or the maximum amount the ERC allows the company to collect from consumers, even if its requested costs are higher.
The Commission, on the other hand, disallowed the recovery of real property taxes proposed by NGCP to be passed on to consumers. It cited existing legal rulings which state that NGCP is exempt from paying real property tax on assets used for its franchise, thus, such costs should not be charged to electricity consumers.
The NGCP operates the country’s high-voltage transmission system, delivering electricity from power generation facilities to distribution utilities across Luzon, the Visayas, and Mindanao. ||
