ERC Approves NGCP Rate Hike for 2016–2022 Period

The Energy Regulatory Commission (ERC) has approved an increase in transmission charges following the completion of the Fourth Regulatory Period (4th RP) Rate Reset for the National Grid Corporation of the Philippines (NGCP), covering the years 2016 to 2022.

In a decision issued during its 1125th regular meeting on March 26, 2025, the ERC set NGCP’s Maximum Allowable Revenue (MAR) at PHP 335.78 billion for the seven-year period using the “as spent” approach and applying a Weighted Average Cost of Capital (WACC) of 11.33%.

The decision was reached by a majority vote of Commissioners Alexis M. Lumbatan, Floresinda G. Baldo-Digal and Marko Romeo L. Fuentes.

To address under-recoveries during the covered years, the ERC approved an additional PHP 28.29 billion in recoverable costs for NGCP, which will be passed on to consumers through higher transmission charges.

The additional cost will be spread over a seven-year recovery period, translating to an average increase of PHP 0.1013 per kilowatt-hour (kWh) in transmission rates starting from the date of decision issuance.

Of the total increase, PHP 0.0629/kWh accounts for the rise in the basic transmission charge, while PHP 0.0384/kWh covers the under-recovered component of the MAR.

“This is a step toward concluding long-overdue regulatory resets while maintaining transparency and consumer protection,” said Commissioner Fuentes in a statement.

ERC Chairperson and CEO Monalisa C. Dimalanta and Commissioner Catherine P. Maceda dissented from the decision, and their official dissenting opinions will be released alongside the full text of the resolutions.

Notices of Commission Action related to this ruling are available at www.erc.gov.ph/Notices-Singular/84158 and www.erc.gov.ph/Notices-Singular/84166.

The 4th RP reset was guided by ERC Resolution No. 08, Series of 2022, which amended the Rules for Setting Transmission Wheeling Rates (RTWR) to streamline the methodology for future regulatory periods.

In line with that, the ERC adopted a phased approach for the 4th RP reset, beginning with Phase 1 covering January 2016 to December 2020.

After soliciting feedback from NGCP and stakeholders in 2023 and 2024, the Commission finalized the determination for both Phases 1 and 2 of the 4th RP.

The ERC also made permanent NGCP’s previously provisional MAR for 2015, amounting to PHP 43 million.

In a separate resolution, the Commission granted NGCP’s claim for a Net Performance Incentive Scheme (PIS) reward for 2014 totaling PHP 783.06 million under ERC Case No. 2014-155 RC.

NGCP is the private concessionaire operating the Philippine transmission grid under a 25-year franchise granted by Republic Act No. 9511.

The company is regulated by the ERC and is responsible for ensuring the reliable delivery of electricity across Luzon, Visayas and Mindanao.