The Energy Regulatory Commission has given National Power Corp. (Napocor) a provisional authority to recoup more than P4.1 billion in under-recoveries incurred by its Small Power Utilities Group (SPUG) from 2003 to 2009.
This amount, to be charged to power consumers nationwide via the universal charge for missionary electrification (UC-ME), is equivalent to a hike of 7.09 centavos per kilowatt-hour (kWh) in the existing UC-ME subsidy.
The resulting UC-ME charge that will be reflected during the August billing cycle is 11.63 centavos per kWh.
“The ERC saw the need to provide Napocor-SPUG with immediate relief so that it can continue its mission of providing electricity to far-flung and mostly island group SPUG areas,” the ERC said in a statement issued Thursday.
The amount approved for recovery, however, was just a quarter of what Napocor-SPUG sought to recoup.
Napocor-SPUG on May 19 filed a petition with the ERC seeking to recoup more than P17 billion in under-recoveries, translating to an additional UC-ME of 27.95 centavos per kWh.
This adjustment was meant to balance Napocor-SPUG’s revenue shortfalls as a result of higher fuel costs and foreign exchange fluctuations, as well as provide a 12-percent return on rate base to cover the state firm’s working capital from 2003-2009.
The state power firm, in a separate statement, said that even with the ERC-approved UC-ME increase, it would still incur a P6.35-billion budget deficit by the end of this year.
“The approved UC-ME will not be enough to allow Napocor to settle its outstanding obligations to its fuel suppliers. As of end-July, Napocor already owed fuel suppliers Pilipinas Shell Petroleum Corp., Filpride, and Petron Corp. close to P900 million,” Napocor vice president for corporate services Urbano Mendiola Jr. said.
“Unless these obligations are paid soon, the suppliers might opt to stop fuel deliveries to the power plants being operated by Napocor-SPUG. We have, in fact, already reduced our operating hours in several areas being serviced by the SPUG,” Mendiola added.
Mendiola said Napocor would be filing a motion with the ERC for the grant of the remaining amount it had sought to recover.
ERC chairperson Zenaida Cruz-Ducut said the regulatory agency needed “to exercise extreme prudence in granting provisional relief to utilities.”