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Napocor rate hike in off-grid areas OK’d


MANILA, Philippines – State-run National Power Corp. has been given the green light to increase the effective power rates in the off-grid areas across the country to recover some P2.3 billion in fuel and foreign exchange costs incurred by its Small Power Utilities Group.

In two separate decisions, the Energy Regulatory Commission allowed Napocor to hike electricity rates in Luzon by a total of 94.92 centavos per kilowatt-hour; P1.1950 per kWh in Visayas; and P1.4680 per kWh in Mindanao.

These increases represented the third installments of the both the Generation Rate Adjustment Mechanism (GRAM) and the Incremental Currency Exchange Rate Adjustment (Icera), covering a 12-month period from Dec. 26, 2004 to Dec. 25, 2005.

GRAM is a mechanism that allows utilities such as Napocor to recover costs associated with fuel and purchased power, while the Icera allows utilities to recover foreign exchange-related costs. These mechanisms are consistent with the principles of free and competitive electricity market as provided under the Electric Power Industry Reform Act (Epira).

The Napocor-SPUG, the state generator’s missionary electrification arm that provides electricity to remote islands and far-flung communities, was allowed to recover the P341 million (equivalent to 39.07 centavos per kWh across the country) from the third Icera installment within two years or until the amount has been collected.

The P1.96 billion from the third GRAM installment will be collected anywhere from 12 months to 64 months.

It is critical for the Napocor-SPUG to be able to recover its costs in a timely so that it will have sufficient funds to address its operational expenses, particularly the fuel cost and its maturing obligations. It should be recalled that Napocor itself is constrained to raise funds as it was no longer allowed to conduct its own fund-raising activities given the huge energy debts that have piled up over the past decade.

The Napocor-SPUG currently operates 232 generating units with a total generated capacity of about 175 megawatts. It serves 214 island and isolated grids providing electricity to 47 customers consisting of 39 electric cooperatives, seven local government units and one multipurpose cooperative.

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Tags: Business , ERC , napocor , News , power

  • brentcom


  • rodben

    easy money ang koryente sa ayaw mo sa gusto gagamit ka nyan, yan ang isa sa mga pangmasa daw na ipinaglaban sa EDSA  26yrs ago.

  • robrano

    Go Green sounds nice. But if you look at Germany, the only country that ends nuclear power in the near future, you can see that green energy costs more, it only can free from oil and coal based, very polluting powerplants and from dangerous nuc;ear power.
    The price increaseshere have nothing to do with real calculation. Nowhere else exist laws which guarantee a certain profit percentage, no matter how good or lousy the business is managed. Foreign exchange rate? With the overvalued peso, the dollar nominated fuel should be much cheaper in pesos than some years ago when the peso was over 50 to the dollar and one barrel near 130 dollar, compared to now 41 and 86 dollar a barrel.
    Free market means to compete with good management, service and maintenance, but not senseless producing suspect “losses” by, f.i., paying exorbitant power prices to IPP suppliers even when they do not produce and deliver a single kw energy. They are paid for what they COULD produce, not for what they deliver. Nowhere else in business such deals are existing and of course guaranteed payment and guaranteed profit does not need any step to improve anything, the profit is safe. Or why RP power prices are among the highest, even compared to countries with much higher costs and income? Or why the grid lines have been separated from the power producer Napocor and now the owner of just a part of the Transco became the neest RP dollar billionaire with earning hundreds of millions within one year? There are the “losses” which have to be “recovered”, not by better working, just by rate increase. Also a kind of “StraightPath” to profit…..

  • Wadav

    If only the govt pursue installing renewables we will never be experiencing these fuel & foreign currency adjustment costs! Energy cost will continue rising in the future! Our country is blessed with a lot of sunshine, Sayang LNG ang di natin pinapakinanbangan. US, Gemany, Australia, Japan, India, just to name a few are all into SOLAR ENERGY, sana gumaya n LNG tau! Ang mura mura Na ng solar panels ngaun!

    • http://pulse.yahoo.com/_GG4T5UNZ3P7SCHSRNJ7PF5JZMM Jimmy

      Yong bahay mo ba eh naka solar na…????  Kung mura ang solar eh bakit hindi yon ang gamitin mo para malaman mo kung gaano kamahal yan  >>??? Ang gamitin natin ay natural gas..! Marami tayo niyan sa Palawan at sa Benham Rise..!!!  Yan ang dapat na e-work out ng gobyerno at hindi yong taas ng taas ang presyo ng koryente…!!!!

      • Wadav

        Yes po sir, I am using solar power in my farm. Solar powered po ang aming water pump at gamit din po namin ang solar power for our lights at tv. Affordable Na po ngaun ang solar electricity.

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