Philippines ERC Cuts NGCP Revenue Request by 15.28%, Approves Php 374.98 Billion to Enhance Grid Reliability and Power Supply Security

The Energy Regulatory Commission (ERC) has approved an Annual Revenue Requirement (ARR) of Php 374.98 billion for the National Grid Corporation of the Philippines (NGCP) for the period 2023 to 2027, marking a 15.28% reduction from the company’s proposed Php 442.60 billion. The decision forms part of the Commission’s Fifth Regulatory Period (5RP) reset, conducted under the alternative rate-setting methodology of the Rules for Setting Transmission Wheeling Rates (RTWR).

The approval follows a comprehensive regulatory review in which the ERC assessed NGCP’s cost structures, capital investments, and operational performance to determine appropriate revenue limits, aimed at ensuring reliable transmission services while safeguarding consumers from excessive charges. The reset also includes capital expenditure (CAPEX) under-recoveries from both the fourth and fifth regulatory periods.

The ERC noted that the Maximum Allowable Revenue (MAR) currently being implemented continues to cover the fourth regulatory period, which was finalized in 2025 for the years 2016 to 2022.

As part of its evaluation, the Commission reduced NGCP’s proposed CAPEX by 17%, excluding projects that were already sufficiently accounted for in the previous regulatory reset. According to the ERC, the approved CAPEX allocation will support critical grid upgrades, system reinforcements, and new transmission projects necessary to meet rising electricity demand and enhance nationwide power reliability.

In addition, the ERC disallowed the recovery of real property taxes (RPT) proposed by NGCP to be passed on to consumers, citing existing legal rulings that exempt NGCP from paying RPT on assets used under its franchise. The Commission emphasized that such costs should not be charged to electricity end-users.

The ARR represents the revenue required by NGCP to cover operating expenses, maintenance, and approved investments, while the MAR serves as the regulatory ceiling on revenues, limiting the amount the company is allowed to collect from consumers regardless of higher cost claims.