ERC allows 10 firms to intervene in NGCP application for MAR

BY LENIE LECTURA – FEBRUARY 14, 2023
from Business Mirror

The Energy Regulatory Commission (ERC) has allowed 10 firms to intervene in an ongoing legal proceeding related to the application of the National Grid Corporation of the Philippines (NGCP) which is seeking approval for its 2016-2020 Maximum Annual Revenue (MAR).

MAR refers to the maximum revenue that the grid operator is allowed to earn from its transmission operations.

In a seven-page order, the ERC granted the petitions for intervention filed by the Manila Electric Co., National Transmission Corp. (TransCo), Alfredo Non, Davao Light and Power Co. Inc., Therma South Inc., National Association of Electricity Consumers for Reforms Inc., Visayan Electric Co. Inc., Power Sector Assets and Liabilities Management Corp., Therma Visayas Inc., and joint petitioner-intervenors Panay Energy Development Corp., Panay Power Corp., Cebu Energy Development Corp. , and Toledo Power Co.

“The Commission found that the petitioner-intervenors have sufficiently proven their substantial interest in the case. Moreover, the Commission emphasized that under the Amended Rules in Transmission Wheeling Rates, TransCo is deemed a necessary party in the instant application,” the ERC said.

The agency likewise directed NGCP to furnish the intervenors all the documents related to its application, except those with pending motion for confidential treatment of information.

The NGCP filed on December 22, 2022 its MAR for the 4th Regulatory Period covering the years 2016 to 2020, in accordance with the alternative form of rate setting methodology under the Rules for Setting Transmission Wheeling Rates (RTWR), with prayer for confidential treatment of information.

NGCP had asked ERC to issue an order of general default against those who have not filed any petition for intervention or appeared during the initial hearing. The ERC partially granted NGCP’s plea in so far as the Luzon stakeholders are concerned, and ruled that the stakeholders from the Visayas and Mindanao must be given an opportunity to appear during the hearings in their regions.

The ERC had said that it will evaluate the actual expenditure of the regulated entity for the said period. “This review will take into consideration all applicable provisions of the rules, using the actual data previously submitted and to be submitted by the regulated entity to ERC, as well as the results of the studies relevant to the reset process.”

NGCP has already provided to the ERC such forecasts of capital expenditure and operating and maintenance expenditure, for each regulatory year occurring during that subsequent regulatory period.

Among others, NGCP’s MAR is being used for transmission projects and other grid investments based on the Department of Energy’s Power Development Plan.