ERC to hear Napocor petition for power rate hikes

THE Energy Regulatory Commission will start this month a series of hearings for the petition of the state-run National Power Corp. to collect an additional 6.97 centavos per kilowatt-hour (kWh) from all power consumers connected to the main grids.

The amount to be collected, which will be reflected in the universal charge for missionary electrification (UCME) component of a consumer’s power bill, will allow Napocor to recover P4.46 billion in shortfalls it incurred in 2010.

Should this petition be approved, Napocor will be able to increase the UCME component in one’s electricity bill to 18.42 centavos per kWh from the current UCME of 11.63 centavos per kWh.

In a notice published in newspapers on Sunday, Napocor said it would recover the amount within a 12-month period and would use the proceeds to help operations of its Small Power Utilities Group (SPUG) in the far-flung off-grid islands.

“To enable the Napocor’s Small Power Utilities Group (SPUG) to continue its present operations in the off-grid areas and prevent the shortage of fuel and the consequent shutdown of the power plants, there is an urgent need for the issuance of a provisional authority allowing the recovery of the shortfall as proposed for approval,” Napocor stressed in its petition.

The state power generator further warned that Napocor might incur a bigger cash deficit by the end of this year if the ERC would not issue a provisional authority soon.

Early last year, some of the remote and off-grid areas where the SPUG has been operating encountered power supply shortfalls because Napocor was unable to pay its fuel suppliers.

Napocor is largely dependent on the UCME to fund its capital and operational expenditures every year following the divestment of majority of the government’s power assets and contracted capacities.

The Department of Justice had earlier barred the cash-strapped firm from conducting any fund-raising activities such as taking out loans or issuing notes and bonds.

These developments largely hampered the capacity of Napocor to pay off its fuel suppliers and put up new facilities within the off-grid areas.

Currently, Napocor operates and maintains 232 small power-generating units with a total generated capacity of about 175 MW, which serve 214 island and isolated grids and provide electricity to 47 customers consisting of 39 electric cooperatives, seven local government units and one multipurpose cooperative./INQUIRER