NGCP tariffs seen tracking continuous downtrend

By Myrna M. Velasco – January 6, 2020
from Manila Bulletin

The pass-on transmission charge of private concessionaire firm National Grid Corporation of the Philippines (NGCP) had been on continuous downtrend in several years – reaching a record low of ₱0.51 per kilowatt-hour (kWh) as of 2019, which is even lower than the ₱0.69 per kWh charge of National Transmission Corporation (TransCo) prior to the privatization of the country’s transmission assets.

The 2019 figure, according to NGCP, had been based on the August 2019 electricity bill (and reflected in the September billing) of a residential customer with 630 kWh – as served by the largest distribution utility in the country.

In data published by NGCP in newspapers, it specified that the share of transmission charge in the overall electricity rate paid for by consumers is just at 4.26 percent; while its ancillary services charge only accounts for 2.12 percent.

Conversely, it has been shown that the share of generation charge or the fraction paid to power plant owners and operators has the lion’s share of 46 percent; while distribution charge corners 32.06 percent; and the rest of the charges (including the taxes that go to the coffers of the national government) would take up the remaining 15.56 percent.

“You pay transmission charges of only about ₱0.04 for every peso spent on electricity,” the transmission firm said. NGCP is the private entity that won the 25-year contract to manage, operate, expand and improve the country’s power transmission system in a privatization exercise carried out by state-run Power Sector Assets and Liabilities Management Corporation (PSALM) in 2009.

At the concessionaire-firm’s assumption on managing the country’s transmission facilities in 2009, the tariff went up to ₱0.73 per kWh compared to the TransCo rate of ₱0.69 per kWh in 2008.

In 2010, transmission tariff went up further to ₱0.76 per kWh, then from that point, there had been successive reductions on NGCP charges on the following years.

Its total charge of ₱0.75 per kWh in 2011 exhibited a very lean cut from the previous year, but the succeeding year in 2012, this was on a relatively heftier decline to ₱0.65 per kwh.

And then in 2013, there had been a seesaw on its charge as it went up anew to ₱0.69 per kwh; then it just went lower continuously from that timeframe onwards. The transmission tariff in 2014 was at average ₱0.64 per kWh; then it had been down slightly to ₱0.63 per kWh in 2015.