NGCP told to refund P200B to consumers

INQUIRER FILE PHOTO

MANILA, Philippines — The National Grid Corp. of the Philippines (NGCP) must immediately refund the P200 billion it had spent on advertising, entertainment, and other expenses after the amount was declared as illegally passed on to consumers by the Energy Regulatory Commission (ERC), opposition Sen. Risa Hontiveros said on Monday.

In a statement, Hontiveros welcomed the disallowance declared by the ERC on the NGCP’s pass-on charges as “a major step towards lowering [Filipino consumers’] electricity bills.”

“This decision should inevitably lead to an urgent refund,” she said.

Hontiveros made the statement after the ERC disallowed P200 billion of the grid operator’s expenses as part of its partial decision on NGCP’s performance and operations.

The questioned amount formed part of NGCP’s spending for “public relations (PR), corporate social responsibility (CSR), representation and entertainment, advertising, donations for COVID-19, charitable contributions, unfinished projects and other miscellaneous expenses.”

While the NGCP may not be prevented from incurring such expenses, the ERC ruled that these should not be passed on to consumers, according to Hontiveros.

She called on the ERC to immediately order NGCP to cause a refund in order to lower the monthly electricity bills of ordinary consumers.

Hontiveros said the ERC should put a stop to power utilities’ “palusot” (excuses) and “tongpats” (kickback) types of charges dressed as PR, CSR and charity works, which costs they eventually recoup from the consumers.

Establish a precedent

“Can you imagine that COVID-19 donations and entertainment expenses are even allowed to be recovered from the pockets of Filipino consumers?” she said.

Hontiveros hopes that this ERC disallowance will establish a precedent across all power utilities under the ERC’s jurisdiction, saying similar expenses incurred by private distribution utilities should also now be disallowed from being recovered from paying consumers.

“We hope the ERC will soon make a final determination of the rates of the fourth (regulatory period) so refunds will come in time for ‘noche buena,’” she said.

The senator lauded the ERC decision, which she has been urging, for the disallowance of said expenses and the lowering of NGCP’s “excessive” weighted average cost of capital (WACC).

“We are happy the new administration of ERC responded to a call that we have been making to discard these controversial pass-on charges from the NGCP’s expenses that do not have anything to do with their business of power transmission,” she said.

Hontiveros also called on the ERC to look into the possibility of lowering further the 10.7-percent WACC it adopted from the computation of its independent consultant for transmission, citing how the NGCP consultant for distribution came out with 8.27-percent WACC for big distribution utilities (DU) and 10.07 percent for smaller DUs.