The Energy Regulatory Commission (ERC) today announced the release of a comprehensive explainer designed to guide energy stakeholders and the public through the results of the Final Determination (FD) for the National Grid Corporation of the Philippines’ (NGCP) Fourth Regulatory Period (4th RP), covering the years 2016 to 2022.
This initiative follows the promulgation of ERC Case No. 2022-089 RC on July 8, 2025, which resolved NGCP’s application for its Maximum Annual Revenue (MAR) for the 4th RP. The decision was made in accordance with the alternative rate-setting methodology outlined in the Rules for Setting Transmission Wheeling Rates (RTWR).
In March 2025, an ERC Majority, composed of retired Commissioner Alexis M. Lumbatan and Commissioners Floresinda G. Baldo-Digal and Marko Romeo L. Fuentes, approved an increased MAR for NGCP totaling PhP335.78 billion for 2016 to 2022. This was determined using the “As Spent” approach and adopting a Weighted Average Cost of Capital (WACC) of 11.33%.
Subsequently, during its 3rd Special Commission Meeting in April, the Majority further resolved that NGCP is entitled to recover PhP28.29 billion in under-recoveries.
These adjustments to the MAR and the recovery of under-recoveries will lead to an increase in transmission charges, effective in the billing month of August. The Commission has set a seven-year recovery period for the PhP28.29-billion under-recoveries. The total average increase in transmission charges will be PhP0.1013 per kilowatt-hour (kWh). This is comprised of an average increase of PhP0.0629/kWh in the basic transmission charge (resulting from the higher MAR) and PhP0.0384/kWh for the under-recovered portion (to be collected over 84 months).
“To ensure full transparency regarding the Commission’s decision on NGCP’s 4th RP reset, we have prepared this explainer,” stated ERC Chairperson and CEO Monalisa C. Dimalanta. “It provides detailed insights into how the Final Determination was made, including the rationale behind the approved computations. It also outlines the alternative approach proposed by the Dissenting Parties, ERC Chairperson and CEO Monalisa C. Dimalanta and retired Commissioner Catherine P. Maceda.”
The ERC encourages all energy stakeholders and the public to review the explainer to gain a comprehensive understanding of the decision’s implications.
