Napocor needs P15B for off-grid plants

NAPOCOR WANTS TO BORROW Napocor would need P15 billion in 2012 to fund the operations of its small power utilities group, but it is requesting the Joint Congressional Power Commission to allow it to raise funds through borrowings, among others.

State-run National Power Corp. (Napocor) said it would need P15 billion next year to fund the operations of its small power utilities group (SPUG) and ensure stable electricity supply in the remote and off-grid areas in the country.

The amount would be used primarily to secure fuel supply of the mostly diesel-fired power plants to avert the rotating brownouts in those far-flung areas that happened earlier this year.

However, Napocor president Froilan A. Tampinco noted that the P15 billion could only come from the collection of universal charge for missionary electrification (UCME) from all power consumers and from revenues that would be generated from the operation of the remaining facilities and contracted capacities owned by the government.

Napocor is no longer allowed to conduct any fundraising activities such as borrowings and bond issuances after a Department of Justice opinion earlier barred the utility firm from doing so. Its revenue stream has also been significantly reduced due to the privatization of government-owned power assets.

According to Tampinco, the company was hoping that it would soon be allowed to raise funds through means other than the UCME to ensure stable supply in the off grid areas.

Tampinco disclosed that Napocor has written the Joint Congressional Power Commission last year to seek clarification on the real intent of the Electric Power Industry Reform Act (Epira).

“We wrote JCPC a letter last year because we wanted to know what the real intention of Epira is, if it was to remove our authority to borrow. We wanted to clarify that because we no longer have any credit sources other than the UCME and the tariff,” Tampinco said.

“We are requesting that they reconsider our authority to borrow. Our argument is that when Epira was passed, it did not terminate our charter, it did not discard our charter. Our charter authorized us as a corporate body to get into financing,” he explained.

“So for us, we are for a more liberal interpretation of the law because our charter has a provision for other means of fundraising, so that’s what we are exploring. Since we are a corporate body with a charter that has authority to borrow, we should be allowed to raise funds,” Tampinco added.

For now, Napocor needed to file before the Energy Regulatory Commission (ERC) an application seeking to collect a new amount for the UCME to be able to raise that P15-billion requirement for the SPUG, Tampinco said.

It is, however, not assured that the ERC will approve the full amount of UCME needed to raise that P15 billion, as what had happened this year.

For 2011, the ERC initially approved a UCME of only 4.54 centavos a kilowatt-hour, which was equivalent to a P2.8-billion subsidy, but way short of the 27.59 a kWh Napocor had originally petitioned.

In August this year, the ERC finally gave Napocor a provisional authority to collect an additional UCME of 7.09 centavos a kWh, equivalent to P4.15 billion in additional funds for the SPUG operations. This raised the UCME to 11.63 a kWh.