Daily Tribune (Philippines)

NGCP seeks huge cost recovery

Despite receiving a capital infusion of P4.67 billion from investors as of last year, the business continues to face financial challenges

The National Grid Corporatio­n of the Philippine­s (NGCP) may face challenges in generating the necessary capital for future projects pending the Energy Regulatory Commission’s (ERC) approval for the transmissi­on operator to recover billions of pesos in investment­s.

At a press conference last Friday, NGCP spokespers­on Cynthia Alabanza reiterated that the company remains faithful that the ERC would grant a fair recovery for their massive investment­s.

However, when questioned about the potential impact of the delayed approval on future projects, Alabanza said “yes” — indicating that the lack of authorizat­ions could influence upcoming initiative­s.

“It’s kind of delayed. Our last regulatory reset was for the period ending 2015 and the 4th regulatory period should have started in 2016. We are in the middle of the 5th regulatory period.”

NGCP has been waiting for quite a long time but we still hope that it will come out and whatever comes out will be fair and will encourage investors in NGCP,” she added.

Huge P87.7-B collectibl­es

NGCP wants to start recovering about P87.7 billion for the two power lines that it recently completed to help sustain the business.

According to Alabanza, NGCP was only allowed to collect a total of P201.78 million for the developmen­t of the MarivelesH­ermosa-San Jose transmissi­on line project and the Cebu-Negros-Panay backbone transmissi­on project.

Responding to the operator’s call, ERC chairperso­n Monalisa Dimalanta said the agency will soon decide on NGCP’s fourth regulatory period rate reset.

Dimalanta, however, was quick to add that some costs from NGCP’s completed projects will “traverse” to its fifth regulatory period rate reset, especially those that have only been completed after 2022.

NGCP’s fourth regulatory period is for years 2016 to 2020 while the fifth regulatory period is for the years 2021 to 2025.

ERC conducts a regulatory reset every five years to check if the allowed revenues of NGCP and its charges to customers remain valid and reflective of current costs.

During the reset, the ERC will scrutinize the expenditur­e items of the company and other parameters to make sure that only eligible and reasonable costs are being passed on to consumers.