Napocor petition seen to increase electricity rates
MANILA, Philippines—Cash-strapped National Power Corp. has sought to recover a staggering P17 billion from electricity consumers to prevent another round of fuel supply shortages and a consequent shutdown of its power plants in the off-grid, far-flung towns.
Napocor, through its small power utilities group (Spug), wanted to recover the amount in a year, a move that will increase the universal charge for missionary electrification (Ucme) by 27.59 centavos a kilowatt-hour, the state firm said in a petition filed at the Energy Regulatory Commission.
Should the ERC approve the application, power consumers connected to the main grids will be forced to pay a higher UCME of 32.13 centavos a kWh from the current 4.54 centavos.
Napocor has long been complaining that it needed a bigger budget as the subsidies provided for the missionary electrification and the revenues it derived from the sale of electricity were not enough to pay for fuel costs.
According to Napocor SPUG, only 31 percent of the actual fuel costs could be recovered through sales revenues. The total amount of actual fuel costs represented 65 percent of the corporation’s operating expenditures from 2003 to 2009–the biggest component of its operating expenses.
Adding to Napocor’s financial woes was its inability to conduct any fundraising such as the issuance of notes and bonds or even tapping the local debt market as it was barred to do so as expressed in an opinion of the Department of Justice.
The power firm is also unable to recover billions of pesos worth of deferred foreign exchange costs and fuel and purchased power costs under the the Incremental Currency Exchange Rate Adjustment (Icera) and the Generation Rate Adjustment Mechanism (GRAM) as its applications for these remain pending.
