ERC cracks open NGCP’s grip on the national grid

By Francis Allan L. Angelo

The Energy Regulatory Commission has approved rules that allow entities other than the National Grid Corporation of the Philippines to finance and build transmission projects, opening a function long held exclusively by the country’s grid concessionaire.

The commission approved and adopted ERC Resolution No. 18, Series of 2026, which establishes the Implementing Rules for the Development, Ownership, and Operation of Point-to-Point Limited Transmission Facilities and for the Financing and Construction of Transmission Projects by Entities Other than the Transmission Network Provider.

The new rules are designed to accelerate the completion of critical transmission facilities needed to connect new power plants to the national grid and to deliver electricity to consumers more quickly and reliably.

Under the framework, qualified generation companies may finance and construct projects identified by the Department of Energy as Associated Transmission Projects, or ATPs.

The National Transmission Corporation, or TRANSCO, may undertake Priority Projects on its own or engage other government agencies, Government-Owned or -Controlled Corporations, or private entities to construct such projects on its behalf, pursuant to DOE Circular No. DC2026-02-0007.

These projects include new transmission lines, substations, switchyards, and other facilities necessary to accommodate additional power generation capacity and strengthen the country’s transmission network.

The ERC said the rules are intended to address delays in transmission infrastructure that often prevent new power plants, including renewable energy projects, from delivering their full capacity to the grid.

ERC Chairperson and Chief Executive Officer Francis Saturnino C. Juan said reliable transmission was central to making sure new supply reaches end users.

“Reliable and adequate transmission infrastructure is essential to ensuring that electricity generated by new power plants actually reaches Filipino homes and businesses. Through these Implementing Rules, we are providing a clear regulatory pathway to enable critical transmission projects to be completed faster while maintaining transparency, accountability, and consumer protection,” Juan said.

“For consumers, this means helping bring more power supply into the grid, reducing bottlenecks, supporting the integration of renewable energy, and ultimately contributing to a more secure, reliable, and affordable electricity system. At the same time, the ERC will continue to conduct prudency reviews and allow only just and reasonable costs to be recovered and passed on to consumers,” he added.

NGCP, the present transmission network provider, said Friday it was reviewing the new rules to protect its franchise.

“We are presently evaluating the newly issued rules in light of our rights, obligations, and responsibilities under the concession agreement, Republic Act No. 9511, and other applicable laws,” NGCP said in a statement. “We will take the appropriate steps to ensure that the integrity of the national transmission framework is preserved.”

The shift represents a major challenge to the concessionaire’s near-two-decade hold on the country’s power lines, even as NGCP acknowledged the need for timely transmission development to support energy security.

NGCP holds an exclusive franchise to operate the national grid under Republic Act No. 9511 and its concession agreement with TRANSCO and the Power Sector Assets and Liabilities Management Corporation, an arrangement that took effect in 2009.

The authority for generation companies to build dedicated transmission lines traces to Section 9 of Republic Act No. 9136, or the Electric Power Industry Reform Act of 2001, which the new rules implement alongside two 2026 DOE circulars, DC2026-01-0001 and DC2026-02-0007.

The new rules also set the terms governing project approvals, construction timelines, the turnover of completed facilities to the Transmission Network Provider, and the recovery of project costs.

The ERC retains the authority to review and determine the fair and reasonable value of transmission projects before any cost recovery mechanism may be implemented, with the network provider reimbursing builders the fair market value of facilities subject to the commission’s prudency review.

The resolution directs NGCP to submit a draft Memorandum of Agreement within 15 days of the resolution’s effectivity, and directs TRANSCO to submit its own draft agreement within the same period.

The commission deliberated and approved the resolution on May 13, 2026, and Juan signed it in Pasig City on June 8, 2026.

The rules take effect 15 days after publication in a newspaper of general circulation.

The ERC said the adoption of the Implementing Rules supports the government’s broader objectives of strengthening energy security, accelerating the country’s energy transition, and ensuring the timely integration of new generation capacity needed to meet the Philippines’ growing electricity demand.

A copy of ERC Resolution No. 18, Series of 2026 may be accessed at https://www.erc.gov.ph/Files/Render/issuance/48661.