Republic of the Philippines


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ERC Directs DUs and NGCP to Update CAPEX Plans

The Energy Regulatory Commission (ERC) directed the Distribution Utilities (DUs) throughout the country and the National Grid Corporation of the Philippines (NGCP) to review and reassess their respective applications for Capital Expenditures (CAPEX) to include the changes in the demand profile and the effects of the current pandemic to the energy system.  The directive was contained in a recent letter sent to the (1) Manila Electric Company (MERALCO); (2) the DUs’ associations, particularly the Philippine Electric Plant Owners Association, Inc. (PEPOA), Philippine Rural Electric Cooperatives Association, Inc. (PHILRECA) and the National Association of General Managers of Electric Cooperative, Inc. (NAGMEC); and (3) and to the NGCP.

    “The Commission noted that the assumptions and forecasts used by the DUs and the NGCP for their proposed projects may need to be adjusted, including the timelines or the projects themselves, as the same may no longer be realistic under the current demand and supply scenario”, said ERC Chairperson and CEO Agnes VST Devanadera.  

The ERC recently resolved to determine measures that will mitigate the impact of the Covid-19 pandemic for all stakeholders especially the consumers. This is in keeping with the sensitivity of the challenges the global order is facing due to the prevalence of the Covid-19 pandemic.  Thus, the Commission directed the DUs and the NGCP to review the assumptions used in its applications and update on the various CAPEX Projects pending before the Commission considering the following factors:

i.    Demand forecast of the areas where the proposed projects will be implemented;
ii.    Timetable on the implementation of the proposed projects; and
iii.    Possible course of action of DUs to address these concerns at hand.

“We expect to receive the DUs and the NGCP’s compliance to our directive within thirty (30) days from receipt of the subject letter through email.  We trust that the regulated entities will extend their usual support to the Commission by assisting us in determining the necessity and timeliness of these CAPEX projects and its possible impact to the electricity consumers given the unprecedented situation brought about by the global pandemic”, ERC Chair Devanadera added.  


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