National Grid seeks revenue target of P45.29b
National Grid Corporation of the Philippines has sought approval from the Energy Regulatory Commission to collect a maximum allowable revenue of P45.287 billion in 2016.
National Grid also asked ERC to approve an interim net performance incentive of P1.029 billion for 2015.
“The immediate implementation is necessary to reduce, if not eliminate, the risk of under-recovery which is substantial to NGCP,” the company said.
National Grid filed a higher maximum allowable revenue in 2016 compared with the 2015 approved revenue of P43.078 billion, but the company said it was expected to translate into the same level of indicative rates to customers amounting to P0.6196 per kilowatt-hour.
“The proposed iMAR2016 is expected to translate into the same level of indicative rates in P/kW-month [pesos per kilowatt-month] and a reduction in the equivalent indicative P/KWh (peso per kilowatt-hour) due to the off-setting effect of the increase in demand with the increase in revenue,” it said.
National Grid said the revenue application for the first regulatory year was interim pending the completion of its reset process for the 4th regulatory period.
It said the revenue and performance incentive “were designed and developed to determine fair and reasonable interim transmission rates that will serve the public interest and convenience, and signal the efficient utilization of transmission facilities that will ultimately redound to the best interest and benefit of the public.”
The performance incentive rewards or penalizes National Grid, depending on the actual level of performance of the regulator against the target level.
The maximum allowable revenue gives the transmission operator a return on reasonable costs.
National Grid said it asked the ERC to recover the reasonable costs necessary to provide transmission services and essential to sustain its full operational strength.
The company received a franchise to operate, manage and maintain and convey the transmission of electricity through a high-voltage backbone system for interconnected transmission lines, substations and related facilities and other activities necessary to support the safe and reliable operation of the transmission system. It is authorized to charge its customers at the rates approved by the commission.
National Grid owns a 25-year concession to operate the country’s power transmission network. It is comprised of Monte Oro Grid Resources Corp., led by Calaca High Power Corp. and State Grid Corporation of China as technical partner.