The Energy Regulatory Commission (ERC) approved a maximum allowable revenue totaling P376.41 billion for the National Grid Corp. of the Philippines (NGCP) for the fifth regulatory period spanning 2023 to 2027.
The ERC set the annual revenue limits at P63.45 billion for 2023, P69.14 billion for 2024, P74.3 billion for 2025, P81 billion for 2026 and P88.48 billion for 2027. This maximum allowable revenue, or MAR, is designed to let the transmission operator recover reasonable costs and earn a fair return.
The regulator also cleared an adjusted annual revenue requirement totaling P374.98 billion for the same five-year span.
“After a comprehensive review of NGCP’s application, together with its supporting documents and relevant stakeholder inputs… the ERC adopts its final determination of the ARR for NGCP,” the commission said.
The regulatory body noted that its findings relied on forecast, actual and historical data, as well as documents provided by the grid operator and insights from consultants.
The ERC said the final determination was guided by transparency and prudence in cost recovery to ensure the financial viability of the company and its ability to provide safe and efficient services.
For the period, the commission approved a weighted average cost of capital of 11.74 percent. It also cleared a return on capital totaling P241 billion, with annual allocations set to rise from P42.52 billion in 2023 to P54.29 billion by 2027.
Capital expenditure for the grid was fixed at P182.34 billion for the period. The annual breakdown includes P37 billion for 2023, P31 billion for 2024, P31.27 billion for 2025, P45.94 billion for 2026 and P37 billion for 2027.
Operating and maintenance expenditures were approved at P67.688 billion, lower than the P72.6 billion originally proposed by the company.
The commission said the rate regulation should strike an equitable balance between the interests of the public utility and the consuming public.
