NGCP ends years-long fight over regulatory fees with ERC

Raffy de Guzman/Rappler

The regulator did not disclose the total amount covered under its compromise agreement with the grid operator, how much of the fees had already been collected, and how much is left to collect

AT A GLANCE

• The National Grid Corporation of the Philippines (NGCP) has agreed to stop contesting permit and regulatory fees imposed by the Energy Regulatory Commission (ERC), settling years of litigation.
• A compromise agreement was signed on October 1, recognizing the fees as regulatory and ensuring that past payments satisfy NGCP's obligations.
• The agreement will be submitted to the Supreme Court and Court of Appeals for approval, with the ERC emphasizing the importance of clarity and public benefit from the fees.

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MANILA, Philippines – The National Grid Corporation of the Philippines (NGCP) has agreed to stop contesting permit and regulatory fees imposed by the Energy Regulatory Commission (ERC), settling years of litigation over whether the grid operator’s franchise exempts it from the charges.

The ERC and NGCP signed a compromise agreement on Thursday, October 1, covering disputes over permit fees imposed on individual transmission projects and annual supervision and regulation fees.

NGCP had consistently paid the charges under protest while challenging them before the Court of Appeals and Supreme Court. The grid operator argued that its congressional franchise exempted it from the fees, while the ERC maintained that the charges were regulatory and administrative in nature rather than taxes.

Under the settlement, NGCP recognizes the permit and supervision and regulation charges as regulatory fees imposed under the ERC’s mandate. It also agreed that it would no longer contest that characterization in the cases covered by the agreement.

Fees that NGCP has already paid will be recognized as satisfying its obligations in the covered cases.The past collections and future fees will be remitted to the National Treasury. 

The ERC, however, did not disclose the total amount covered under the compromise agreement, how much had already been collected from NGCP, and how much is left to collect. (READ: No more VAT on system loss in electricity bills starting October)

“For years, this dispute stood in the way of a clear and settled understanding between the ERC and NGCP on the nature of these fees. This Compromise Agreement finally puts that question to rest, in a manner that respects the ERC’s mandate, gives NGCP the certainty it has sought, and ensures that the public benefits through funds that will now flow to the National Treasury,” ERC Chairperson Francis Juan said.

The agreement was signed by Juan and NGCP president and CEO Anthony Almeda during a visit by NGCP officials led by Henry T. Sy Jr., vice chairman of NGCP and son of SM founder Henry Sy Sr.

The settlement is not yet final. The ERC and NGCP said they will submit the agreement to the Supreme Court and Court of Appeals for approval within 30 days, after which they will await the courts’ action. – Rappler.com