Power rate hike seen starting next month

Power consumers will have to pay an additional 7 centavos per kilowatt hour (kWh) under the universal charge for the missionary electrification (UCME) component in their electricity bills starting next month.

This came after the Energy Regulatory Commission (ERC) allowed the state-run National Power Corp. (Napocor) to recover from all grid-connected consumers the rest of its fuel purchase and foreign-exchange costs under the fourth to sixth installments of the incremental currency exchange rate adjustment (Icera) and the generation rate adjustment mechanism (GRAM).

These are costs incurred by Napocor to supply power to the off-grid areas covered by its Small Power Utilities Group (SPUG), the state generator’s missionary electrification arm that provides electricity to remote islands and far-flung, inland barangays.

Napocor’s SPUG operations are subsidized by the main grid customers through the UCME component of their electricity bills.

Initially, grid-connected consumers were supposed to shoulder only half of the P4.15-billion costs that the Napocor is seeking to recover through the GRAM and Icera mechanisms. The difference was supposed to be added to the generation charges being collected from consumers within the SPUG areas.

However, it was decided that these costs should instead be recovered fully from the main grid consumers to “mitigate the impact of the rate adjustment on the consumers within the SPUG areas,” explained ERC executive director Francis Saturnino Juan.

This “will enable Napocor SPUG to recover its true-up adjustments in a timely manner so that it will have sufficient funds to address its operational expenses, particularly the fuel cost and its maturing obligations,” the ERC stated in two separate orders it issued late last month.

This means that the UCME for grid-connected consumers will now increase to about 11.54 centavos per kWh from the current 4.54 centavos per kWh, according to Juan.

However, in what amounts to a sleight-of-hand, main grid consumers will not technically feel the increase as they are already paying the 11.54 centavos.