Napocor defers off-grid subsidy collection

The National Power Corp. (Napocor) is holding off the collection of its universal charge for missionary electrification (UCME), which subsidizes power generation activities in off-grid, remote areas of the country.

Collection of the UCME will be deferred for six months to help ease the burden of customers amid the ongoing controversy over power generation hikes, Napocor explained.

UCME makes up part of the so-called “universal charges”—a line item in the electric bill of consumers.

The charge is passed on to the customers of power distributors such as Manila Electric Co.

Napocor’s request for a six-month deferment of the UCME collection was granted by regulators. The deferment started in January 2014.

In an order, the Energy Regulatory Commission (ERC) directed Napocor, the Power Sector Assets and Liabilities Management Corp. (PSALM), and all distribution utilities to defer the collection of the UCME equivalent, to P0.0381 per kilowatt (kWh) until after July 2014.

The collection of the UCME will commence later and will be reflected in the August 2014 billing, ERC said.

The total amount of deferred collections, which will reimburse the state firm’s actual 2012 expenses for missionary areas, is P2.5 billion, Napocor president Ma. Gladys Cruz-Sta. Rita said via text message. With the deferment, only about half of the UCME due will be collected this year, while the other rest will be taken next year.

ERC said Napocor and PSALM should ensure the fuel supply in SPUG areas and continue releasing subsidies to new power producers or qualified third parties. The quasijudicial body also said the deferment of the UCME should not affect the payment of cash incentives to qualified renewable energy developers in missionary areas.

The Napocor’s board of directors authorized management to inform the ERC of the proposed deferment for six months.

Napocor’s board said the deferment was in response to recent events such as the emergency shutdown of the Malampaya natural gas pipeline and the resulting record rate increase from generation costs and related charges.

“There is a need to alleviate the burden of any increase in electricity rates to end users, pending the review of policies in the electricity industry,” the Napocor board said in its resolution.

It was the Department of Energy that urged the Napocor to defer recovery of UCME.