NGCP Maintains Compliance With Existing Regulations

Without an approved regulatory reset process, the National Grid Corp. of the Philippines (NGCP) maintained that it adhered to the regulations in place at the time by requesting an interim revenue scheme from the Energy Regulatory Commission (ERC) to ensure the continuity of its operations.

-  Delon Porcalla

"During the time that NGCP continued working despite the lack of a regulatory reset process, we followed the latest approved rules, since we had no choice as new rules had not yet been put in place," Cynthia Alabanza, NGCP assistant vice president and head of the Public Relations Department, told the House committee on legislative franchises.

"That's why we used the old rules and asked for an interim revenue scheme, so the work of NGCP could continue," she said.

With the regulatory reset process delayed by almost 10 years, Alabanza stressed that NGCP had no choice but to follow the previous rules to keep its business running.

Based on the rules in place at the time, there were particular rules that allowed NGCP to use that regulatory framework wherein consumers would be charged on a staggered basis so they wouldn’t be overwhelmed, Alabanza explained.

“For every project, we apply with the ERC with that kind of framework,” she added.

For its part, the ERC agreed with the NGCP’s position, admitting there was an absence of rules following its failure to approve the 4th regulatory reset application in time.

“The regulatory reset rules apply for a particular regulatory period. When that regulatory period lapses, there really is a vacuum in the law,” Dimalanta said.

Based on the original timeline, NGCP’s 4th and 5th regulatory reset applications should have covered the years 2016 to 2020 and 2021 to 2025, respectively.

The ERC, however, modified the regulatory reset periods to 2016 to 2022 and 2023 to 2027.

While NGCP filed its issues paper to demonstrate its desire for a reset, Dimalanta stressed that “it doesn’t cure the fact that there were no rules at that time.”

“In 2020, NGCP applied for an interim rate. It’s a recognition that there were no valid issued, approved rates from 2016 all the way to 2020, that’s why they applied for interim,” Dimalanta explained.