NGCP Seeks Stable Path For Grid Expansion After ERC Revenue Cap
- February 13, 2026
Table of Contents
The National Grid Corp. of the Philippines (NGCP) is pushing for a return to a regular regulatory cycle following the Energy Regulatory Commission’s (ERC) decision to cap its allowable revenue at about ₱375 billion for the fifth regulatory period (5RP), a move the grid operator said clears a long-standing backlog and could help ensure the timely execution of transmission projects.
In a decision promulgated on Jan. 30, the ERC set NGCP’s maximum allowable revenue (MAR) for 2023 to 2027 at between ₱374.98 billion and ₱376.4 billion, lower than the ₱442.6 billion annual revenue requirement (ARR) the company had proposed.
Predictable Regulatory Process
NGCP spokesperson Cynthia Alabanza said the company is aiming for a “normalized” process for its sixth regulatory period after delays in previous rate resets complicated infrastructure planning.
“We are grateful to the ERC for releasing it [the 5th regulatory period],” Alabanza said. “So the backlog in terms of regulatory periods was released already. Moving forward, if the process is faster, it would be normalized for the sixth regulatory period.”
She said NGCP is reviewing the ERC’s latest issuance to determine how to manage and spread out approved amounts from both the fourth and fifth regulatory periods without causing undue volatility in transmission rates. The ERC expects the system operator to file for its 2027 MAR later this year.
The rate-reset process is a forward-looking exercise that requires utilities to submit projected expenditures and planned projects over a five-year period. The ERC then evaluates past performance, actual spending, and forecast data to determine allowable revenues.
Approved Revenue Ceiling
Under the ERC’s final determination, NGCP’s approved MAR for each year of the 5RP is ₱63.4 billion for 2023, ₱69.1 billion for 2024, ₱74.3 billion for 2025, ₱81 billion for 2026, and ₱88.5 billion for 2027. For 2023, NGCP has been directed to implement the approved MAR starting Aug. 1, 2026, until further notice.
The MAR serves as a state-mandated ceiling on the revenues NGCP may collect annually to operate, maintain, and expand the country’s transmission network. It is composed of operating and maintenance expenses, return on capital, and depreciation of assets.
The ERC said it considered NGCP’s submissions, comments from stakeholders and intervenors, technical consultants’ recommendations, and its own independent review. The commission added that the decision adheres to “the principles of transparency, reasonableness, and prudence in cost recovery,” consistent with its mandate under the Electric Power Industry
Reform Act to ensure just and reasonable rates.
Impact On Consumers
In reviewing NGCP’s application, the ERC reduced several proposed cost components. It trimmed operating and maintenance expenses using an efficiency-based model anchored on historical data and cost drivers.
The regulator also disallowed the recovery of real property tax-related costs, citing NGCP’s franchise tax provisions and Supreme Court rulings affirming its exemption from real property taxes on assets used in connection with its franchise. The ERC said some projects included in the proposal had already been covered by prior budgets.
As a result of the lower revenue cap, households and businesses are expected to see a reduction of about ₱0.06 per kilowatt-hour in power bills starting August 2026.
Basis For Rate Reset
The 5RP decision follows the completion of NGCP’s fourth regulatory period (4RP), which covered 2016 to 2022. For that period, the ERC approved a MAR of ₱335.78 billion, resulting in a total under-recovery of about ₱28.29 billion to be collected from consumers over seven years. This translated to an increase of P0.1013 per kilowatt-hour in transmission charges.
Under the 4RP, the ERC adopted an “as spent” approach and applied a weighted average cost of capital of 11.33 percent in determining allowable revenues.
NGCP holds the sole concession and franchise to operate the country’s power transmission network. It is 60 percent owned by Synergy Grid & Development Philippines Inc., led by Henry Sy Jr. and Robert Coyiuto Jr., while State Grid Corp. of China holds the remaining 40 percent stake.
Source:
https://mb.com.ph/2026/02/12/ngcp-seeks-regular-rate-resets-to-ensure-power-grid-stability
https://businessmirror.com.ph/2026/02/09/ngcp-gets-nod-to-recover-p63-45b-from-consumers
