THE Energy Regulatory Commission (ERC) suspended the provisional collection of revenues by the National Grid Corp. of the Philippines (NGCP) this year due to the changes in power supply and demand caused by the coronavirus disease 2019 (COVID-19) pandemic.
In an order on Thursday, the ERC said it paused the implementation of NGCP’s interim maximum annual revenue (MAR) of P47.05 billion for 2020, which was granted on Feb. 13.
It said it could not consider the supply and demand forecasts previously used as a basis for the determination of the ceiling revenue, and that it should be “reassessed and analyzed as such assumptions no longer hold true in the light of economic disruptions brought about by the COVID-19 pandemic.”
The commission noted the “significant” drop in power demand between April and June this year, compared with the same months in 2018 and 2019. For example, April registered the “steepest” decline in demand by 21% year-on-year.
Even if demand picked up two months later, the June level is still lower by 6% over a year ago.
“In this regard, the Commission deems it necessary to suspend the implementation of the approved (interim) MAR 2020, considering that the demand forecasts which were used as basis for its determination…are no longer valid and would therefore need to be re-assessed in the light of current and updated market and economic data,” the order read.
The ERC’s provisional revenue cap was higher by P3.3 billion, compared with last year’s P43.79-billion limit. Despite this, the commission noted a decrease in transmission charges by four centavos per kilowatt-hour (kWh) to P0.4701/kWh.
The revenue limit is seen to “further increase the burden of consumers” during this time of a pandemic, according to a House Resolution No. 953, which seeks an investigation into an alleged surge in power rates. The resolution was filed in June. It remains pending with the House good government and public accountability committee.
The maximum revenue cap is the amount that the system operator can collect from customers for transmission operations.
Presently, the share of transmission charges in customers’ electricity bills is only 4% or P0.04/kWh, according to NGCP. — Adam J. Ang
