Cusi orders Napocor to stop rate hike in off-grid islands

MANILA, Philippines — Energy Secretary Alfonso Cusi has ordered the National Power Corp. (Napocor) to stop its plan to raise generation charges in missionary and off-grid islands of the country by passing on to consumers the taxes and added fuel costs.

Cusi said Napocor should instead find ways to reduce missionary subsidies by improving operational efficiency.

Cusi issued the directive to Pio Benavidez, Napocor president, after the state-owned corporation petitioned the Energy Regulatory Commission (ERC) to increase missionary generation charges in off-grid islands.

The increase would result in the poorer consumers in off-grid islands paying much more in generation charges than Metro Manila consumers.

Napocor had filed an application with the ERC to increase the missionary generation charge in off-grid communities by P2.9140 per kilowatt-hour in Luzon, P3.4034 per kWh in the Visayas and P3.4515 per kWh in Mindanao.

This would raise the generation charge by more than 50 percent to P8.5544 per kWh.

In his memorandum to Benavidez, Cusi expressed serious concern that the generation charge of P8.5544 per kWh sought by Napocor—compared to the P5.25 charge in Manila—would further burden consumers in the poorer, off-grid islands.

Keep rates affordable

This, he said, is contrary to the government’s mandate to keep power rates affordable under the Electric Power Industry Reform Act of 2001.

He further directed Napocor to reduce missionary subsidies instead of passing on to poorer areas the costs of taxes and fuel and other costs that would cause this 51-percent increase in their generation rate.

Napocor had applied to pass on to consumers the added taxes on fuel being used to generate power in off-grid islands (P1.9648/kWh).

This is on top of its previous application for an increase of P0.9492/kWh, bringing the total increase to P2.9140/kWh.