Napocor seeks power rate hike

State-owned National Power Corp (Napocor) is applying for an increase in electricity rates to recover the added costs of fuel price fluctuations and foreign currency adjustments.

In a petition before the Energy Regulatory Commission (ERC), Napocor said the operation of its generating plants in off-grid areas in 2012 cost P4.21 billion due to fuel price increases.

Napocor said that, to recover the amount it supposedly incurred, it may need to impose an average rate hike of P1.55 per kilowatt-hour (kWh) across the country for four years.

The rate adjustment will translate to about P1.48 per kWh for Luzon, P1.47 per kWh for the Visayas, and P1.80 per kWh for Mindanao.

Such rate increases would include off-grid areas.

Off-grid areas, such as islands and remote towns, are not connected to the power grid.

As such, consumers that get power from the grid essentially subsidize rates in these areas because of the high cost of operating isolated power plants.

Napocor primarily operates and manages the power facilities that have been transferred to fellow state-owned firm Power Sector Assets and Liabilities Management Corp. (PSALM).

Separately, Napocor also submitted a petition asking the ERC to allow it to recover P14.48 million in costs arising from forex movements in the settlement of debts and operating expenses in 2012.

To recover the amount, Napocor proposed to hike rates only in off-grid areas by P0.02 per kilowatt-hour for 12 months.

These petitions were filed by Napocor as part of its 10th Generation Rate Adjustment Mechanism and Incremental Currency Exchange Rate Adjustment or GRAM and Icera, which allow it to recover additional fuel and forex costs, respectively. Riza T. Olchondra