Generation facilities under the National Power Corp.’s Small Power Utilities Group (SPUG) are expected to run out of fuel again by the end of the month, as suppliers refuse to make additional deliveries because of the state firm’s ballooning arrears.
An official privy to the matter said the P2 billion that the Department of Budget and Management released to Napocor in March for payment of fuel-related debts had been used up.
As a result, most additional fuel purchases made over the past two months remain unpaid. Credit lines with suppliers had thus been severed.
Napocor-SPUG’s suppliers include Pilipinas Shell Petroleum Corp., Petron Corp., Filpride Resources Inc., and Unioil Petroleum Philippines Inc.
If Napocor-SPUG would be unable to raise fresh funds to cover its fuel needs, areas under the SPUG would again experience massive blackouts like what happened a few months ago. In some areas, the blackouts lasted for weeks.
At this point, the source said Napocor management would again be seeking some help from the government, by way of a supplemental budget, on top of what was approved under the General Appropriations Act.
The source related that Napocor sought an operating budget of around P18.3 billion, but what Congress approved was only P7.5 billion. Of this amount, only around P3 billion was allocated to fuel and lubricants for SPUG plants—which is not enough to cover all the fuel requirements of the SPUG facilities for an entire year.
Another source of funds would be a higher universal charge for missionary electrification (UCME), which would be charged to power consumers on a per-kilowatt-hour (kWh) basis.
Under Rule 13 Section 4a of the implementing rules and regulations of the Electric Power Industry Reform Act of 2001 (Epira), Napocor-SPUG operations would be funded by revenue from power sales in missionary areas and from a share in the UCME.
The Energy Regulatory Commission, however, approved a lower UCME for Napocor in September last year. From P0.0978 per kWh, the UCME was reduced to only P0.0454 per kWh. This lower UCME was equivalent to a P2.8-billion subsidy to Napocor-SPUG areas.