ERC OKs P32 billion NGCP projects

MANILA, Philippines — The Energy Regulatory Commission (ERC) has approved the two transmission projects of National Grid Corp. of the Philippines (NGCP) worth over P32 billion.

During its latest commission meeting, the ERC authorized the implementation of the P18.8-billion Western Luzon 500-kilovolt backbone project and the P13.2-billion Nagsaag-Santiago 500-kV transmission line.

The Western Luzon project aims to accommodate the entry of bulk generation capacity and reinforce the transmission network in the region in line with efforts to ensure a higher level of power reliability and security.

The Nagsaag-Santiago line project, meanwhile, is designed to handle the incoming capacities from geothermal, solar, and hydropower plants across Ifugao, Kalinga and Apayao.

The ERC has directed the NGCP to complete the Western Luzon project by October 2027 and the Nagsaag-Santiago line by November 2030.

Both projects are subject to optimization based on their “actual use and verification of expenses incurred” during the reset process for the subsequent regulatory period (RP), the regulator said.

The commission is also set to communicate to the Department of Energy its observations about the growing number of projects being built in areas with limited access to transmission facilities.

This condition, the ERC said, often requires the construction of new and extensive power lines with limited capacity.

Earlier this month, the ERC gave the green light to NGCP’s proposed P1.63-billion Pinili 230-kV substation project aimed at addressing the forecasted load growth in the Ilocos region.

As the country’s sole transmission operator, the NGCP is responsible for the operation, maintenance and development of the state-owned power grid.

Last month, the ERC completed its deliberations on NGCP’s fourth RP, covering the years 2016 to 2022, permitting the grid operator to collect an additional P28.29 billion from consumers.

Although the official decision has not yet been issued, the regulator said the cost recovery translates to an increase of P0.1013 per kilowatt-hour in transmission charges over a seven-year period.

The rate reset process sets the rules and parameters for the investment, operations and pricing mechanisms of highly regulated entities like NGCP to determine how much should be charged to consumers.