NGCP seeks full recovery of P87.9B investment in completing 2 major projects

Systems operator National Grid Corporation of the Philippines (NGCP) is seeking regulatory approval for it to recover the full cost it invested to complete and energize two major transmission line projects.

At a press briefing in San Juan City on Wednesday, NGCP spokesperson Cynthia Alabanza disclosed that the grid operator’s total investment for the Mariveles-Hermosa-San Jose (MHSJ) and the Cebu-Negros-Panay (CNP) transmission lines reached P87.9 billion.

In particular, for the MHSJ project, the NGCP filed for a project cost of P20.94 billion, but the Energy Regulatory Commission (ERC) only allowed it to recover P25.78 million from its customers.

For the CNP, the grid operator invested P67.98 billion, but the regulator gave the thumbs up for the company to recover only P176 million.

For the two projects, Alabanza said the NGCP only collected P201.78 million —still about P87.7 billion shy from its entire investment of P87.9 billion.

As to how much in recovery fees will be reflected in consumers’ power bills should the ERC heed NGCP’s appeal, Alabanza said, “I cannot provide specific numbers yet because our appeal covers numerous projects.”

The NGCP only highlighted the two projects as these are the major ones and were the latest to be activated, she said.

“I hope the consumers will understand. Like sari-sari stores, you will not sell at a loss,” she added.

“Our call is that apart from the interest of consumers, we also seek that the need of investors for a fair regulation and recovery for our projects will be considered,” the NGCP official said.

In a text message, ERC chairperson and CEO Monalisa Dimalanta said the NGCP’s fourth regulatory period (4RP) rate reset filing, covering 2016 to 2020, is still being evaluated and is targeted to be issued next month.

Dimalanta said some costs incurred by the NGCP will “traverse into the 5RP (fifth regulatory period) considering the completion of these projects just recently (beyond the 2022 cut-off for 4RP).”

The ERC conducts a rate reset process for its regulated entities such as the NGCP to determine how much of its forecasted expenditures and proposed projects over a five-year regulatory period could be passed on to consumers.

The rate rest process is usually a forward-looking exercise but since the non-occurrence of the rate-reset for NGCP since the lapse of the third regulatory period 2011-2015, “the current ERC is constrained to evaluate for the fourth regulatory period whether the costs already incurred by NGCP for the previous years were prudent, reasonable, and economically efficient.” — RSJ, GMA Integrated News