National Grid Corporation of the Philippines (NGCP), the country’s sole system grid operator, announced that it would use the interim Maximum Allowable Revenue (iMAR) to fund the start of construction for 20 projects in its pipeline.
The 20 infrastructure projects the grid operator plans to start this year are expected to be completed in 3 to 4 years.
Among the planned projects are seven major undertakings, including the Calaca-Dasmarinas 500-kilovolt (kV) project, Hermosa-San Jose 500kV project, Pagbilao Extra High Voltage (EHV) project, Cebu-Negros-Panay 230kV backbone project, Mindanao 230kV backbone project, Luzon and Visayas voltage improvement projects, and Tuguegarao-Magapit 230kV project.
Last December 6, 2016, NGCP filed a Motion to the Energy Regulatory Commission (ERC) to implement its iMAR for project budgeting, which the ERC approved on December 19, 2016.
The ERC approval of the iMAR allows NGCP to use the old calculation system and amounts for capital expenditures pending the ERC’s issuing the final determinant for the 4th Regulatory Period.
“The iMAR approved will go back in the grid as investment”, Cynthia Alabanza, NGCP spokesperson and adviser for external affairs, said in a press briefing on Tuesday.
NGCP collects the MAR from its customers, which are distribution utilities and electric cooperatives that use the country’s transmission facilities.
In turn, the power distributors compute the equivalent of these transmission charges to determine the transmission rate impact on the electricity end-users.
ERC approved MAR in 2015 was P43.078 billion, for 2016 it was initially given a P41 billion MAR but eventually given a P43.789 billion, and for 2017 the interim MAR is reenact of 2016, which ERC allowed NGCP to recover additional P 2 billion unrecovered 2016 MAR in 2017.
The application of NGCP for MAR forms part of the annual verification and adjustment of tariffs allowed under Republic Act No. 9136 or the Electric Power Industry Reform Act (Epira) of 2001.
NGCP earlier said the ERC’s approval would allow NGCP to implement in a timely manner its capital expenditure programs and cover its operation and maintenance expenses for the calendar year.
NGCP is a private firm that since 2009 operates, maintains and develops the country’s transmission network.
It acquired the 25-year concession of National Transmission Corp. in an auction conducted by the Power Sector Assets and Liabilities Management Corp. in 2008.