STATE -owned National Transmission Corporation (TransCo) on Thursday flagged significant delays in transmission projects by the National Grid Corporation of the Philippines (NGCP), citing their role in driving up electricity costs and contributing to inefficiencies that impact millions of Filipino consumers.
Speaking at a hearing of the House Committee on Legislative Franchises, TransCo Vice President Dinna Dizon detailed how project delays and regulatory practices, including the controversial “as-spent” approach, have contributed to rising transmission rates and grid inefficiencies.
Dizon cited NGCP’s underperformance during the 4th Regulatory Period (2016–2022), saying the company completed just 75 of its targeted 258 projects—or 29%—representing only 10% of its planned capital expenditures (CAPEX).
“NGCP completed much of the other projects within 2023–2024, or beyond the 4th regulatory period. There are projects with maximum delay exceeding nine years. Similarly, 58 ongoing projects, or 75%, are also delayed, with the maximum delay again for some exceeding nine years,” Dizon told lawmakers.
She added that the Energy Regulatory Commission (ERC) had penalized NGCP P15.8 million for unjustified delays.
The hearing, led by Parañaque City Rep. Gus Tambunting, is part of a broader inquiry into NGCP’s compliance with its franchise agreement and the impact of its operations on electricity costs.
Dizon explained that NGCP’s project delays are exacerbated by ERC’s adoption of the “as-spent” approach in calculating the company’s Maximum Annual Revenue (MAR).
“The adoption of the as-spent approach results in a higher transmission rate by 80 centavos per kilowatt hour, give or take a few,” Dizon said, noting that this method allowed ongoing and delayed projects to inflate the company’s MAR, directly affecting consumers’ electricity bills.
Beyond higher transmission rates, Dizon outlined the broader effects of delayed projects on the energy sector, including missed opportunities to connect cheaper renewable energy sources to the grid.
“There is cost implication directly for the transmission charge. For every ₱5 billion worth of CAPEX, the additional amount of transmission rate is about one-half of one centavo per kilowatt hour,” Dizon said.
She added: “But there is also indirect impact, like the cost to the economy. Higher electricity costs may be a result of using more expensive alternative power sources because the lines are not available to deliver the cheaper sources.”
Dizon stressed the importance of accurate rate-setting practices to avoid passing unnecessary costs onto consumers.
“The objective of performance-based regulation is to ensure that only completed projects and efficient cost of ongoing projects are included in the opening RAB [Regulatory Asset Base],” she said, adding that the reconciliation process should ensure fairness and efficiency in rate determinations.
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