THE Energy Regulatory Commission (ERC) has given provisonal approval to the capital expenditure (capex) program of the National Grid Corporation of the Philippines (NGCP) for this year.
The NGCP application covers P113.4 billion in capital expenditure for 2017 to 2020, but the ERC only approved the P5.5 billion capex for 2017.
“The commission needs to study further the propriety of the capex projects and their corresponding costs for the years 2018 up to 2020. There is no urgency to grant approval of those projects which can be done upon completion of the public hearings,” ERC Chairman and CEO Jose Vicente Salazar said.
“We need to establish and ensure that the projects are indeed necessary so as not to unduly burden the consumers with exorbitant power rates,” he said.
Fifty-eight projects out of the sixty-five 65 proposed by NGCP were found to be urgent and crucial to ensure continuous, efficient and reliable electricity supply, according to the ERC.
An ERC evaluation also found that the proposed capex of P113.4 billion included expenditures beyond 2020.
The provisional approval is subject to the following conditions:
The proposed projects are subject to optimization based on its actual use and implementation during the reset process for the next regulatory period
NGCP to conduct competitive bidding for major materials in implementing the proposed projects
NGCP to pay on staggered basis the permits amounting to P41,311,170 for 2017
NGCP was created in line with Republic Act No. 9136, or the Electric Power Industry Reform Act (EPIRA). It was mandated to assume the functions of the National Transmission Corp. (Transco) in operating country’s power grid.